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Chinese state-owned enterprises form USD 22 billion fund to invest in emerging strategic industries

Chinese state media reported the formation of a 150 billion Yuan (~ USD 21.8 billion) investment fund by the China Aerospace Science and Technology Corporation (CASC), together with a group of centrally administered state-owned enterprises (SOEs) to invest in emerging strategic industries, under the guidance of the State-owned Assets Supervision and Administration Commission of the State Council (SASAC).

CASC is also an SOE and it is the main contractor for the Chinese space program. It has a number of subordinate entities which design, develop and manufacture a range of spacecraft, launch vehicles, strategic and tactical missile systems, and ground equipment. It will help implement the national innovation-driven development strategy and the integration of military and civilian development strategy. 

The fund, with an pledge of 113.9 billion Yuan for the first phase, will target industries such as 3D printing, aerospace, biological medicine, clean energy, high-speed rail, IT, nuclear energy, power grid, quantum communications, robotics, and shipping.

At the fund's establishment ceremony, CASC chairman Lei Fanpei said that the investment fund was established to improve the SOEs' innovative ability to make breakthroughs in core technology, boost emerging industries and foster new driving forces for growth, and increase cooperation among the SOEs.

The sponsors of the fund include rolling-stock maker CRRC, Industrial and Commercial Bank of China (ICBC), Postal Saving Bank of China, Shanghai Pudong Development Bank and Beijing municipal government. As a next step, the Beijing Municipal Government will support the structural reform of industries through resources and policies.

This follows an announcement in January this year of the launch of a 100 billion Yuan (~US$14.6 billion) Internet investment fund by the Chinese government. Overseen by the Cyberspace Administration of China and Ministry of Finance, tThe fund will support Internet companies and the Internet Plus Action Plan via equity investment. ICBC invested 10 billion Yuan (~US$ 1.5 billion) in the fund. According to the media release, 30 billion Yuan (~US$ 4.4 billion) has been raised from State-owned banks and enterprises.

In August 2016, China launched a 200 billion Yuan (US$30 billion) state-controlled venture capital fund, financed by China Construction Bank Corporation, China Reform Holdings Corporation Ltd. (CRHC), the Postal Savings Bank of China and Shenzhen Investment Holding Co., Ltd to support innovation and technology upgrading in centrally-administered state firms.

Featured image: Cory M. GrenierCC BY-SA 2.0

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