This book has sought to provide an understanding of the unique features of the Chinese venture capital (VC) market, especially from the perspective of legal and corporate practices. Drawing on the materials covered earlier in this book with regard to the life cycle of VC in China – fundraising, investment, and exit – this chapter seeks to answer the questions raised in the first chapter on a more principled basis. 1. How did China create the world’s second-largest VC market within such a short period of time? 2. Are there any lessons of general applicability, which may be extracted from China’s VC story? 3. What are the ways forward for China’s VC market? These questions will each be discussed in turn.

This chapter concludes by considering the four main themes of the book: 1) How public spending has evolved over time, initially focussing on sound rules of the game and essential public goods and services before shifting more and more to welfare spending while debt grew to record levels.2) The huge differences in government performance and efficiency, the reinvigorating role of expenditure reforms and the pragmatic ‘optimal’ size of government, that does not require public spending of more than 30–35%, perhaps 40% of GDP.3) The main fiscal risks in the social and financial sphere from an ever-growing ‘insurance role’ of the state, which has contributed to rising debt and could put stability and sustainability at risk. 4) The case for strong rules and institutions to contain public spending, debt and fiscal–financial vulnerabilities. If governments focus on their core tasks and do them well, they underpin a well-functioning market economy with prosperity, freedom, opportunity and trust. This is the message of the social market economy model and it holds for the challenges related to the Coronavirus crisis which had broken out when this book went into publication. Not heeding this message in the past has contributed to governments being over-burdened and over-indebted today. We will all benefit from a lean, efficient and sustainable state.

Well-functioning governments are at the basis of a modern, democratic society, the rule of law and a market process that generates trust, opportunities, prosperity and freedom. To maintain the economic success of advanced economies and the trust of our citizens, governments need to do well on their core tasks: setting sound rules of the game in the market economy and providing high-quality, essential public goods and services. These include security, education, infrastructure, basic social safety nets, the environment and sound public finances. Public expenditure is an important tool in this regard, but more spending is not correlated with more trust – ‘better’ spending and better performance on core tasks is. This chapter also sets out the map of the book: How public spending has evolved over time and how it has been financed in Part I; government performance and efficiency, the role of expenditure reforms and the ‘optimal’ size of government in Part II; the main fiscal risks in the social and financial sphere in Part III; and the case for strong rules and institutions to govern public spending and limit fiscal risks in the concluding Part IV.