China's State Council has issued fresh guidelines to support the country's venture capital funds while preventing a potential bubble. The council's newly released regulations addressed a slew of issues, including loosening requirements for investment and improving tax breaks and the market exit mechanism.

The guidelines also clarified government agencies responsible for each regulation. In addition, the guidelines urge venture capital firms to support the real economy and tech start-ups, and make more long-term investments. That's to reduce "bubbles" in investment valuations that could fuel market risks.