New Delhi, July 28 -- When CXMT listed on July 27th, the Chinese government experienced what Silicon Valley types call "a sudden wealth event". The computer-memory chipmaker raised 57.9bn yuan ($8.6bn) at 8.66 yuan per share in a blockbuster initial public offering. Shares in CXMT closed after its first day of trading on Shanghai's STAR Market at 49 yuan, an increase of 470%, valuing the firm at a hulking 3.3trn yuan. That makes CXMT China's most valuable company listed on the mainland, and its IPO the largest in Asia this year. Good news for CXMT's largest equity owner, and its earliest investor: the Chinese government.

Xi Jinping, China's president, has emerged in recent years as the country's most important venture capitalist. He has ...