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China’s National Development and Reform Commission (NDRC), the country’s top economic planner, and other government ministries, jointly issued a guide for government investment funds on Monday. 

It marks the first time at the national level that systematic norms are being established to guide the investment direction of government investment funds, according to a Xinhua News Agency report on Monday.

The measures on strengthening the layout planning and investment guidance for government investment funds focus on three major aspects of government investment funds—“where to invest,” “how to invest,” and “who manages”—and it puts forward 14 policy initiatives.

According to the guide, the government investment funds are required to support major national strategies, key industrial fields, and weak links where market mechanisms are unable to effectively allocate funds. 

The funds should promote the deep integration of scientific and technological innovation with industrial innovation, focus on cultivating emerging pillar industries, and adhere to the principle of “investing early, investing in small enterprises, investing long-term, and investing in hard-core technologies,” the guide noted.

To better guide investment directions, it is stipulated that the investment directions of government funds must strictly comply with encouraged industries that are listed in major national plans and national-level industrial catalogs.

And, government investment funds are banned from investing in restricted industries, eliminated old industries, and other sectors explicitly prohibited by state policies, according to the guide.

An official from the NDRC said that, in recent years, some government investment funds have encountered issues during operation, such as mismatches with local resource appropriations, unclear functional positioning, and homogenization of investment directions, according to a Xinhua report. In response to the problems, the new guide explicitly stipulates the functional positioning and investment priorities for national-level funds and local funds.


Global Times