China's venture capital (VC) industry is set to raise a record $12.51 billion in Q1, according to data from the Asset Management Association of China. This comes as Beijing increases its investments in the technology sector, including in AI and robotics. Nearly all of the top investors in the 1,200 new yuan-denominated VC funds created in the first quarter are government entities or state-owned firms. The ten largest VC investors in China were all state-backed entities and committed 33 billion yuan, half of the total. Some investors warn that state dominance in VC funding could distort capital allocation and fuel asset bubbles.