By Sun Fei, Research Team on “The Proper Role of Government Investment Funds in Promoting Transformation and Upgrading in China’s Economy”, Financial Research Institute , DRC

Research Report, Special Issue, No.60, 2019 (Total 1688) 2019-8-16

Abstract: In recent years, China’s government investment funds have entered a period of rapid development. By the end of 2018, 1,636 government investment funds had been set up, with a targeted financing volume of 9.93 trillion yuan and a total amount of 4.05 trillion yuan raised, yielding fruitful results in supporting industrial development and facilitating economic transformation and upgrading. But behind the vigorous development of government investment funds, there are also some problems, such as the investment completion rate is relatively low and the stage of investment is rather late, the professional management level is yet to be improved and the future pressure of concentrated exit is great. Besides, affected by policy changes and macro-economic environment, China’s government investment funds are facing challenges such as difficulty in raising capital caused by the New Rules on Asset Management, project shortage due to the economic downturn, difficulty in exiting during the rough time of private equity investment sector, and that the Merger and Acquisition Regulations restricts overseas business expansion. In a bid to promote the long-term sustainable development of China’s government investment funds and achieve the policy objective of bolstering industrial development, it is necessary to deeply analyze the existing problems and future challenges and actively seek solutions.

Key words: government investment fund, fund management, New Asset Management Rules