news

한어Русский языкEnglishFrançaisIndonesianSanskrit日本語DeutschPortuguêsΕλληνικάespañolItalianoSuomalainenLatina

For Wang Dong, vice president of Jinyumaowu, who has been investing in Wuxi for many years, fundraising is a headache for him.

"The scale of funds that have been invested is 3 billion yuan. Each of the 10 funds has state-owned assets, of which Wuxi state-owned assets account for 30%-40%, part of which comes from the guidance funds of Wuxi governments at all levels, and the other part is the capital allocation of Wuxi state-owned enterprises. At the peak, the Wuxi team operated three funds at the same time, but now there is only one left, with more than 20 million yuan of funds available for investment, which must be invested as soon as possible within the year."

For GP (fund manager), funds are equivalent to "raw materials", and Wang Dongzheng urgently needs to find LP (fund investor) to "cover positions". His choice of "covering positions" is still state-owned assets, which is also a microcosm of the entire primary market, that is, the status of state-owned assets is constantly rising.

The model of LP investment and GP investment has always been the basis for the operation of the primary market. Today, with the establishment of local mother funds, government-guided funds and other government investment funds, state-owned assets have become the most important investors in the primary market, and with frequent direct investments, the primary market dominated by state-owned assets is quietly changing.

Behind the large-scale layout of local governments is the ambition to use government funds to leverage more social capital to help the development of local industries.

However, local government investment funds still need to strike a balance between multiple goals, such as ensuring fund security, attracting investment, and investing early, investing in small companies, and investing in scientific and technological innovation. Therefore, this competition is not only about the competition between scales, but also about how to better stimulate the role of state-owned capital.

In 2006, Suzhou Industrial Park launched the "Suzhou Model" based on the equity participation model. Photo/Visual China

State-owned assets surge

At the end of July, several major news stories broke out in Shanghai regarding government investment funds.

First, on July 26, it announced the establishment of three leading industry mother funds for integrated circuits, biomedicine, and artificial intelligence, as well as a future industry fund, with a total scale of 100 billion yuan. Subsequently, on July 30, the General Office of the Shanghai Municipal Government issued the "Several Opinions on Further Promoting the High-Quality Development of Shanghai Venture Capital", which attracted attention from the industry.

This indicates that Shanghai has joined the current government investment fund competition with a more active attitude. In this competition, the scale of the government investment fund of 100 billion yuan can only be regarded as "normal".

Since 2023, various regions have established mother funds of tens of billions and hundreds of billions. In February last year, the 150 billion yuan Guangzhou Industrial Investment Mother Fund was established, focusing on investments in semiconductors and integrated circuits, new energy, biomedicine and health industries. From the end of last year to June this year, Beijing established a total of 8 industrial funds in two batches, with a total scale of 100 billion yuan. In June of this year, Jiangsu established the Jiangsu Provincial Strategic Emerging Industry Mother Fund with a scale of 50 billion yuan.

These government investment funds targeting the current hot tracks can either invest directly or guide sub-funds as government-guided funds, that is, they can participate in the sub-funds as LPs with a certain proportion, and the remaining part will be raised by GPs from the society. The so-called "guidance" is to leverage more social capital with government funds. For example, Guangzhou hopes to gradually build an industrial fund cluster of more than 600 billion yuan by establishing a 150 billion yuan industrial investment mother fund.

The concept of government-guided funds is not new. In November 2005, the National Development and Reform Commission and ten other ministries jointly issued the "Interim Measures for the Administration of Venture Capital Enterprises", which clearly stated that "the state and local governments may establish venture capital guidance funds to support the establishment and development of venture capital enterprises through equity participation and provision of financing guarantees."

In March 2006, Suzhou Industrial Park and the National Development Bank jointly initiated the establishment of a venture capital mother fund, with an initial scale of 1 billion yuan. This marked the beginning of the "Suzhou model" based on the equity participation model, which mainly refers to the local government investment fund and market-oriented institutions jointly establishing sub-funds to attract and gather market-oriented institutions, and ultimately drive the development of local industries. This method is also the usual operating method of market-oriented mother funds, so the "Suzhou model" is also considered to be more market-oriented.

However, the government-guided funds did not really "explode" until after 2015. In November of that year, the Ministry of Finance issued the "Interim Management Measures for Government Investment Funds." This year is also regarded as the "first year of government-guided funds."

Since then, as Hefei has cultivated local display devices, new energy vehicles and other industries through investments in companies such as BOE and NIO, "direct investment" has become increasingly favored by local governments, that is, operating industrial investment funds through state-owned capital platforms and directly investing in strategic industries that are intended to attract investment. Due to its style of direct government investment, Hefei was once known as the "city of venture capital."

However, market participants generally believe that "it is very challenging for state-owned assets to make direct investments." One interviewee said frankly: "The Hefei model is difficult to replicate in other cities. It is a product of a specific historical period. State-owned assets helped BOE when it was on the verge of survival. At that time, the real estate market was still on the rise, and there was strong demand for home appliances such as televisions. Companies represented by BOE eventually made China the world's largest panel production capacity. Moreover, BOE already has a state-owned background, which reduced the pressure on Hefei's state-owned assets when making decisions."

In fact, current government investment funds often combine the two models of sub-funds and direct investment, but participating in sub-funds is still the mainstream.

According to a person close to the Jiangsu Province Strategic Emerging Industries Fund of Funds, the Jiangsu Provincial Government hopes to give full play to the leverage of the 50 billion yuan fund of funds. 70% of the funds will be used to guide sub-funds, and only 30% will be used for direct investment. In the fund of funds cooperating with 7 cities, the provincial fund of funds contributed 25%, which is equivalent to a four-fold increase in funds. The city-level fund of funds will then guide the sub-funds, with a maximum contribution of 30%. After these two rounds of leverage, the provincial fund of funds can eventually leverage about 10 times the amount of funds, that is, 400 to 500 billion yuan.

Private equity research institution LP Investment Advisory conducted a thorough analysis of the LPs behind PE/VC funds and found that behind the 7,383 newly registered private equity funds in China in 2023, there were 7,080 institutional LPs investing. Although the number of LPs from state-owned assets and government-guided funds only accounted for one-third, their subscribed capital accounted for 70% of the total LP investment, and the investment was mainly from provincial and municipal government-guided funds.

The role of government investment funds as LPs has become more prominent. "In the past, the capital structure of the fund was 35% state-owned and 65% social capital, but now the proportion of state-owned capital has risen to 45%." Wang Dong told China News Weekly that the increase in the proportion of state-owned capital is largely due to the decrease in individual investment, which previously came largely from small and medium-sized business owners.

At a time when fundraising is difficult, if state-owned LPs increase their shareholding ratio in sub-funds, it will undoubtedly attract more market-oriented GPs to cooperate with them.

"For example, the upper limit of the proportion of the Wuxi government investment fund's shareholding in a sub-fund is 30%." Wang Dong admitted that this has restricted the development of Wuxi's equity investment market to a certain extent. Many local governments have raised this limit to 50% or even higher. "Currently, fundraising is very difficult. If the government-guided fund's shareholding ratio is increased to 50%, it means that the GP can raise 20% less funds, and the fund will be easier to establish."

However, as local governments are under financial pressure, the funding sources of some government investment funds with large target sizes are also being tested. According to estimates by multiple institutions, by the end of 2023, the cumulative target size of government-guided funds will exceed 13 trillion yuan, and the subscribed size will be about 7 trillion yuan. It is not difficult to see that the target size may be far from the subscribed size.

Wang Dong told reporters that some market-oriented GPs claimed to cooperate with the government to establish sub-funds with a scale of 2 billion yuan, but there may be no follow-up after the first fund with a scale of 200 million yuan is issued.

Similar situations have been common in recent years. The team of Yuan Yaguang, a partner of Yida Capital, once worked with a city to establish a 200 million yuan fund, which was essentially an investment in science and technology enterprises. The initial investment structure of this fund was 20% from the city level, 20% from the district level, 30% from Yida Capital, and the remaining 30% was market-based funds.

Yuan Yaguang told China Newsweek: "After one year of operation, the fund needed all parties to contribute the remaining 50% of the funds, but the municipal government said it had no money. To put it bluntly, they breached the contract, but to put it more tactfully, they supported market-oriented funds like us to take over the corresponding shares." In the end, Yida Capital not only took over the shares originally held by the government, but also added an additional 10 million yuan investment on this basis, expanding the fund size to 210 million yuan. After that, when the second phase of the fund was established locally, the municipal government did not contribute any more funds.

"Nowadays, the government investment fund budget must be reported in September and October every year, and the scale of investment for the next year will be determined at the end of the year. In the past, the government investment fund often exceeded the scale in actual operation because local governments could squeeze out funds, but now it will be strictly controlled because there are too many places to spend money." said a GP.

However, the entire equity investment market today cannot do without state-owned capital. Therefore, the institutions that understand the nature of state-owned capital and adhere to market-oriented operations will have more advantages.

Above: 10.5-generation production line of Hefei BOE Display Technology Co., Ltd. Photo/China News Service

Below: JAC NIO's Hefei Advanced Manufacturing Base. Photo/China News Service

As compliance pressure escalates

After state-owned assets dominated the primary market, market-oriented institutions increasingly cooperated with state-owned assets. The incompatibility between the ever-increasing compliance requirements of state-owned assets and the behavioral habits of market-oriented institutions has attracted more and more attention.

Yuan Yaguang said that he deals with state-owned LPs in southern Jiangsu on a daily basis. The marketization level of each company is similar, but they all pay attention to compliance. "If you encounter a GP with a more 'wild' approach, the management pressure of the state-owned LP will be relatively large."

"There is a lot of pressure on the audit of government investment funds now. GPs are often asked to provide a series of information. We will support this, but some market-oriented institutions and foreign-funded institutions may not cooperate." He explained. Sometimes, the audit requirements may not meet the "status quo" of the industry. For example, when auditing state-owned LPs, it is necessary to penetrate and grasp the decision-making documents of sub-funds, but the cooperation model between LPs and GPs means that LPs bear limited liability and do not need to bear decision-making risks. However, the current regulatory orientation is like this, so the compliance requirements are upgraded.

The current compliance pressure is escalating, which is considered to be a correction to a series of chaos surrounding government investment funds. In mid-April 2023, Liu Handong, who served as the director of the Jiangsu Provincial Department of Finance from 2012 to 2018, was investigated. He also served as the director of the Jiangsu Provincial Government Investment Fund Management Office, and Xiang Lin, who served as the director of the secretariat of this fund, was also investigated at the end of August last year. People familiar with the relevant situation revealed to reporters that many GPs cooperated with the investigation at that time.

A GP in southern Jiangsu told China Newsweek that the Jiangsu Provincial Government Investment Fund, which was established in September 2015, will be handed over to professional market institutions for operation in the future. "Before, they invested in many sub-funds like 'sprinkling pepper on the surface', and some of the GPs were relatives of the fund."

The problems of the Jiangsu Provincial Government Investment Fund have triggered a rectification of government investment funds at all levels in the province, which has not yet been completed. A person in charge of a market-oriented GP in Jiangsu told reporters that they also cooperated with the investigation and provided relevant materials, and some individual projects were considered to have problems.

"The other party will ask, why is there no repurchase when the repurchase period has expired? Or if the company has not met the performance requirements in the gambling agreement, why not handle it according to the agreement? But we have experienced many cycles. If a company can survive the three-year epidemic, it will definitely develop in the future. Should we be more humane or more rigid at this time?" He expressed confusion.

Under the supervision requirements of state-owned assets, such contradictions have always existed for government investment funds, and are further highlighted when the primary market faces great exit pressure. In 2023, the exit cases in China's equity investment market fell by 10% year-on-year, and the tightening of IPOs was the main reason.

Yuan Yaguang admitted that during the period of tightening IPOs, "we are relatively tolerant towards the invested companies. As long as we believe that the company still has development prospects, we will generally exempt them, or even postpone or make additional investments after completing internal compliance procedures."

However, he admitted that there are indeed cases where state-owned LPs put pressure on GPs to have invested companies repurchase their equity. "Some science and technology companies have not yet formed positive cash flow and are unlikely to go public in the short term. State-owned LPs want to exit as soon as possible, so they strongly ask GPs to take action. If the GP coordination fails, the company will either initiate the repurchase on its own or file a lawsuit. Sometimes companies have finally negotiated a round of financing, but because they cannot meet the exit requirements of state-owned shareholders, financing cannot be carried out."

Ensuring the safety of funds is obviously the top priority of state-owned assets. Once the company's development situation is judged to be abnormal, it will be required to withdraw. "If the principal is lost, the relevant departments will review any small flaws." Yuan Yaguang admitted that the industry was also relatively chaotic before, and some GPs lacked experience.

The most direct manifestation is problems with asset allocation, such as not paying attention to the matching of mature projects with early projects. "Generally speaking, we will ensure that the fund starts to distribute in the third or fourth year, and in the sixth or seventh year, the principal and threshold income will be distributed to LPs, so the state-owned assets will naturally no longer be under pressure," he said.

Even if a fund does not make a loss as a whole, individual loss-making projects will be subject to review. "Therefore, there cannot be any problems in the process, and the compliance pressure is very high." Yuan Yaguang once worked as a GP of a provincial government investment fund, investing more than 4 billion yuan in 160 to 170 projects, of which two or three projects were in trouble. The provincial finance department sent a lawyer to the GP to understand the situation of the impairment project. When talking with the partners, the lawyer would first focus on the relationship between the institution and the invested enterprise. But in fact, the main reason for the setback of this enterprise was the epidemic, which affected overseas orders.

"Market-oriented GPs can still view profits and losses from the perspective of the fund as a whole, but government investment funds often have to hold them accountable for direct investment projects on a project basis. Once the invested enterprise falls into a 'half-dead' situation, the fund will often immediately initiate a repurchase, and will sue the enterprise if the repurchase is not successful," Wang Dong admitted.

Recently, with the tone of relevant documents, senior officials have higher expectations for government investment funds to serve as "patient capital" and to invest more in "early, small, and scientific and technological innovation." However, facing the increasing regulatory pressure, how to meet expectations has become a problem.

Why are state-owned assets so “patient”?

The demand to ensure the safety of funds will inevitably affect the investment targets and periods chosen by government investment funds.

"State-owned LPs actually have limited expectations for the rate of return on funds. It used to be 8%, but now it has dropped to 6%." A GP told the reporter that the most important demand of state-owned LPs is to protect their principal. "As long as the principal is protected, everything else is fine. Therefore, they will be cautious when investing in each fund. Among the funds that have been invested, the worst performing fund has an annualized rate of return of 3%, which is acceptable to state-owned LPs."

He told reporters that the fund generally uses 20%-30% of its funds to invest in mid- and late-stage projects. It may take only three years from investment to exit, pursuing low returns, but four to six percent of the capital can be recovered in about three years. "If you want to maximize the benefits of the fund, you must try to invest in early projects and arrange a longer investment cycle, but we hope to continue to cooperate with local state-owned LPs, so we cannot use the local government's funds to the limit, but help them recover the funds as soon as possible and then invest in new sub-funds."

"In 2015, we managed a dollar fund. When it was about to expire, the U.S. investors were more pragmatic. Based on the fund's good performance, they decided to extend it for another 10 years and slowly exit. Market-based RMB LP exits are also more flexible, but state-owned LPs are generally more cautious about extensions and basically insist on immediate exit after expiration." An investor in the biopharmaceutical field told reporters.

Data shows that the average lifespan of Chinese private equity funds is between 5 and 7 years, far lower than the 12 years of their U.S. counterparts. This is due to the LP structure problem, as the main LPs in the U.S. PE and VC markets are pension funds.

Wang Dong lamented to the reporter that many funds abroad have a lifespan of up to 15 years, and the ones that really have the potential to become patient capital are insurance funds and family office funds. "State-owned LPs ask us to submit an exit plan every year. Although it is not mandatory, they will remind us to 'try to exit in full' when the fund is about to expire. We sometimes suggest to state-owned LPs that it would be a pity to exit some high-quality projects too early, and state-owned LPs sometimes allow us to extend the time."

The root cause of state-owned assets’ lack of “patience” is the difficulty in tolerating risks, but “investing early, investing in small companies, and investing in scientific and technological innovation” are precisely the ones that carry higher risks.

Liu Jianjun, a professor at Hunan University and former deputy director of the Second Market Department of the China Securities Regulatory Commission, said at a forum at the end of June this year that government-guided funds should return to their original functions and avoid competing with private venture capital and forming a "crowding-out effect" on private capital. "I have systematically studied foreign government-guided funds and found that their guidance focuses on guiding sub-funds to invest in areas where the market fails, such as early stages and key strategic industries."

Funds investing at different stages have completely different operating logics. "The investment funds within the Zhangjiang Hi-Tech system have gone through a development process. Initially, a VC fund was established, hoping to cover different life cycles of enterprises. However, operating a fund of more than 10 or 20 billion yuan to invest in the angel round, post-investment services would be very stressful, so we started to set up angel funds of 100 million or 200 million yuan to facilitate more in-depth post-investment services." Fu Xiaoying, deputy general manager of Zhangjiang Haocheng, told China News Weekly that Zhangjiang Haocheng has just established the first state-owned angel fund in Pudong.

In recent years, local government investment funds have independently set up funds focusing on early-stage projects and arranged separate management methods, and the fault-tolerant mechanism is the key.

For example, the "Hefei Angel Investment Fund Management Measures" was issued in 2023, raising the risk tolerance of Hefei Angel Fund to 40%. Recently, Chengdu Hi-tech Zone has also set the loss tolerance of seed, angel, venture capital, industrial investment, and M&A funds at varying degrees, ranging from 80% to 30%. Shanghai also proposed in the 19 measures to support the development of the venture capital industry launched at the end of July to optimize the state-owned capital assessment and evaluation mechanism, including establishing and improving a long-term assessment and evaluation mechanism that adapts to the characteristics of the venture capital industry.

Yuan Yaguang said that if government investment funds focus on angel stage projects, they will need longer time limits, looser fault tolerance mechanisms, and higher management fees. "General funds often do not set up fault tolerance mechanisms, but angel funds should set up a 50% fault tolerance rate. If there is no fault tolerance mechanism, who would dare to do angel investment?"

Some people from Hubei state-owned assets also told reporters that the provincial discipline inspection commission is currently taking the lead in introducing fault-tolerant measures for government investment funds, but in actual operations it is often the discipline inspection commission that corrects the mistakes. Therefore, Hubei simply suggested that the discipline inspection commission take the lead in formulating a fault-tolerant mechanism.

Fu Xiaoying admitted that she hopes to measure success or failure from the perspective of the fund as a whole rather than from the perspective of individual projects, but because the success rate of early small projects is very low, the overall performance of the fund is still poor. "We hope to avoid risks as much as possible through some internal mechanisms. For example, the newly established angel fund has a team mandatory follow-up investment mechanism, that is, team members must also invest in projects invested by the fund. We hope that this method can better constrain the team to be diligent and responsible."

However, compared with areas of market failure such as early-stage investment, "fund investment attraction" may be the most realistic goal of current government investment funds.

Some companies, such as NIO Energy, Tianbing Technology, and Sichuan Energy Power, received large amounts of VC/PE investment in the first half of 2024. Photo/China News Service

"Fund Investment" is rolling up

Although he has never worried about "returning investment", Yuan Yaguang is often approached by heads of institutions, hoping that he can recommend local projects in Wuxi. "Because the return investment pressure is very high and difficult to complete."

He has tried to assign someone to take charge of investment promotion work. "His assessment is not on investment, but on providing investment promotion services to the government. The company's database will also specifically mark whether an enterprise has the idea of ​​developing in Wuxi."

The so-called "return investment" refers to the government-guided fund investing in a sub-fund, and the sub-fund investing a portion of the funds in local enterprises according to the agreed ratio. This is regarded as the key to the local government's "fund investment attraction" through the government investment fund. Although according to data released by the Mother Fund Research Center, the overall average return investment ratio requirements of government-guided funds have dropped by nearly 40% in the past six years, "return investment" is still an unavoidable topic.

"The return ratio of 1:1.5 is the common standard." Wang Dong said that for market-oriented GPs, as long as there are enough high-quality projects to invest in, it is a win-win situation for both parties to meet the return requirements without changing their investment logic. In July this year, Jinyu Maowu just won the "Return Benchmark Award" from the Xinwu District Government of Wuxi City.

Wang Dong is used to considering investment attraction when investing. When investigating foreign projects, he will first ask whether the other party is likely to land in Wuxi. If it is possible, it will be easier to discuss investment. "Nowadays, it is usually the cooperation of fund investment and park landing policies that can attract projects."

In the investment value sequence of state-owned LPs, the first is financial security, and the second is supporting local industrial development.

"Some state-owned LPs have put forward higher return investment requirements to us, and said that as long as the return investment task is completed, all surpluses other than principal and interest can be rewarded to the GP." Wang Dong told reporters that there will be corresponding assessments on whether the GP can attract projects for the local area. The state-owned LPs will invest in stages. If the GP fails to complete the return investment target, the state-owned LP may no longer invest.

Some state-owned LPs even require GPs to attract a project before they consider investing. State-owned LPs do not expect excessively high returns, and their stronger demand is to see investment attraction and implementation as soon as possible. However, for social capital LPs and GPs, profitability is naturally placed in a more important position.

"We try to take into account different demands." Wang Dong said that it is relatively easy to complete the return investment task, so that more funds can pursue projects with higher returns. For market-oriented GPs, it is also crucial to choose which state-owned LPs to cooperate with. "We hope to cooperate with some regions with a strong industrial foundation. Even if there is no return investment requirement, we are willing to find investment projects in the local area, and even exceed the return investment requirement."

He gave an example: "For example, we hope that there will be national-level parks in the local area. Because of the advantages of hardware conditions and supporting policies, more subsidies can be given to enterprises, and enterprises are more willing to settle down. Although there are fewer high-quality projects on the asset side than before, there are still many high-quality projects in the Yangtze River Delta, Pearl River Delta, Beijing-Tianjin-Hebei, Chengdu-Chongqing region, especially in the Yangtze River Delta and Pearl River Delta. Many funds are willing to look for projects in these two regions."

However, when many funds with the mission of "returning investment" gather in the Yangtze River Delta and the Pearl River Delta, "competition" becomes inevitable. A GP in the Yangtze River Delta lamented to reporters that the competition in the Yangtze River Delta has become "white-hot". "We have also encountered projects being snatched away, and the other party temporarily raised the price after the price had been negotiated. Although companies will still give priority to places with good government reputation, it is not possible for investors to grab projects by raising the valuation by 20 to 30 million yuan. However, companies that lack "life-saving money" are more likely to move away."

One of his investment projects was just moved from the Yangtze River Delta to Zhangzhou, Fujian, because it could not continue to raise funds locally. The Zhangzhou fund agreed that once the company completed the registration of its headquarters in Zhangzhou, half of the investment would be paid, and the other half would be paid after the first invoice. "Digging projects through equity investment does not generate GDP, but only transfers GDP between different regions, and there will even be losses in the relocation process."

Some cities with relatively strong industrial bases are facing the pressure of being "poached", especially when local governments are turning their attention to emerging industries such as semiconductors and biomedicine.

"If I say it doesn't matter, it would be insincere." When asked if he was worried about other local governments "poaching" projects through fund investment, Fu Xiaoying said that on the one hand, as a shareholder of the enterprise, he should stand with the enterprise; but on the other hand, from the perspective of state-owned assets, he naturally hopes that the enterprises he has cultivated can stay in the local area. "This contradiction has been felt more strongly recently. We can only participate in the development process of enterprises earlier and more deeply, and hope that the business system of enterprises can stay in the local area, so that it is more reasonable for enterprises to stay in the local area from the perspective of operating costs."

Wang Dong has "grown up" to the rules. In recent years, he has been looking for projects from first-tier cities. "The projects from first-tier cities have been spilling over a lot." He said frankly: "On the one hand, first-tier cities are not very sensitive to some small and medium-sized enterprises. On the other hand, first-tier cities have convenient transportation to the Yangtze River Delta. For example, biopharmaceutical companies can move to Wuxi almost seamlessly, and relocating to Wuxi can reduce costs."

In the past 12 months, he has attracted two projects from first-tier cities to Wuxi, both of which are mid- to early-stage projects. "Now government investment funds are also willing to invest in local start-ups, hoping to occupy a certain share in them, so that when faced with 'poaching' by foreign governments, the other party first needs to purchase this part of the equity at a premium."

"Nowadays, all regions attach great importance to attracting investment, but it is indeed too competitive. Not only between provinces and cities, but also between districts and counties in a city. The policies and clauses given by various places are similar. How government-guided funds can better, accurately and efficiently attract investment is a very important topic that deserves serious study." Zhang Jian, vice president of Shenzhen Capital Group and general manager of Shenzhen Guidance Fund Investment Co., Ltd., said at an industry summit.

An industry insider told the reporter that with the implementation of the "Fair Competition Review Regulations" on August 1, "fund investment promotion" is considered to be one of the few "loopholes" left. He believes that "fund investment promotion" has its advantages. Compared with the previous method of giving subsidies to enterprises, fund investment promotion can not only allow the government to see "return money", but also eliminate some space for shady operations. After all, there are market-oriented institutions to help check the projects.

"There will definitely be 'more and more' funds, and regions that can more easily issue funds will have a greater advantage in the future." He also lamented that if some regions in the central and western regions cannot increase the proportion of government investment funds, for example, to more than 50%, it will be more difficult to implement funds in the future.

Published in the 1153th issue of China Newsweek magazine on August 19, 2024

Magazine title: Government investment funds open new competition

Reporter: Chen Weishan

Editor: Min Jie