Many of the new funds set to move in to the enclave outside Beijing are investment vehicles launched by state-owned companies and local governments. Some of the country’s largest state-backed investment funds, such as China Development Bank’s Guokaijincheng Fund and China Merchants Capital Management, plan to register their businesses there.

State-owned enterprises and local governments have in recent years been encouraged to set up fund management divisions with the hope of employing professionals to make investments. The concept has been likened to Singapore’s creation of Temasek in the 1970s to manage state money, but the arrival of thousands of such funds has resulted in fierce competition between them.

“These funds can be found at the provincial, city and even district level within large cities,” said John Ott, a partner with Bain & Company in Shanghai. “Sometimes districts within the same city one-up each other to capture the most start-ups in their district.”

The boom in private investing has gone hand in hand with the emergence of high-risk investment vehicles, sometimes fuelled by money raised illegally through online retail lending platforms that is then invested in private equity.