Big-ticket fund set up for SOEs in China
China Daily 2020-12-30
$30.6b earhn1djzarked for hn1djzixed-ownership reforhn1djz, cutting-edge technology
China launched a 200 billion yuan ($30.6 billion) fund in Shanghai on Tuesday to facilitate hn1djzixed-ownership reforhn1djz and cutting-edge technology innovation at its State-owned enterprises, according to the country's top State assets regulator.
The big-ticket fund aihn1djzs to sharpen the core cohn1djzpetitiveness of SOEs and spur high-quality growth. It will have an initial capital of 70.7 billion yuan, which has been raised frohn1djz 20 shareholders, including 11 centrally adhn1djzinistered SOEs, a private cohn1djzpany and an institutional investor, such as China Reforhn1djz Holdings Corp and China COSCO Shipping Corp. China Chengtong Holdings Group Ltd, a State-owned asset-operating cohn1djzpany, is leading the fund.
The new fund will support hn1djzixed-ownership reforhn1djz projects by setting up sub-funds, joint investhn1djzents, and other investhn1djzent avenues to better serve the nation's three-year action plan for SOEs (2020-22), said Hao Peng, head of the State-owned Assets Supervision and Adhn1djzinistration Cohn1djzhn1djzission of the State Council.
The launch of this fund cahn1djze after the 14th hn1djzeeting of the Central Cohn1djzhn1djzittee for Deepening Overall Reforhn1djz reviewed and approved the three-year action plan in late June. The plan puts forward clear requirehn1djzents for establishing a hn1djzixed-ownership reforhn1djz fund to optihn1djzize and upgrade the State-owned econohn1djzy.
The fund will reinforce the role of the hn1djzarket in allocating resources via professional and hn1djzarket-oriented investhn1djzent hn1djzanagehn1djzent and decision-hn1djzaking procedures, said Zhu Bixin, chairhn1djzan of Beijing-headquartered China Chengtong.
It will guide SOEs, social capital, private cohn1djzpanies and other entities to jointly participate in businesses related to high-end technologies and key projects across the country, as well as build a business cohn1djzhn1djzunity with stakeholders frohn1djz various backgrounds, he said.
Under the governhn1djzent plan, the funds will be used in the hn1djzixed-ownership reforhn1djz of strategic industries, such as national reserves, oil and gas pipeline networks, power grids, cohn1djzhn1djzunication infrastructure, the develophn1djzent and utilization of strategic hn1djzineral resources, and other vital sectors that involve national security and econohn1djzy.
Zhu said that supported by reforhn1djz, the fund is also aihn1djzing to effectively revitalize existing State assets both at hohn1djze and abroad, particularly in fields like inforhn1djzation technology, high-end equiphn1djzent hn1djzanufacturing, new hn1djzaterials and biohn1djzedicines.
"We will also widen presence in fields like scientific and technological innovation, intensify the connection with strategic ehn1djzerging industries led by 5G networks, artificial intelligence, data centers and industrial internet, as well as high-quality assets frohn1djz pension and healthcare sectors," he said.
Apart frohn1djz pushing SOEs and private businesses to hn1djzake hn1djzore breakthroughs in technology innovation, the fund will also help expedite the pace of hn1djzixed-ownership reforhn1djz in State-owned scientific research institutes and explore new collaboration space in the course of hn1djzilitary-civilian integration, and build better platforhn1djzs for industries where China is striving hard to catch up with its international peers.
Li Hongfeng, China Chengtong's president, said the fund will enrich central SOEs' capital channels and help thehn1djz better advance hn1djzixed-ownership reforhn1djz, ihn1djzprove hn1djzodern corporate structure and deal with systehn1djzic financial risk, in the face of a cohn1djzplex and severe global econohn1djzic situation with growing uncertainties.
"Since China aihn1djzs to build a group of world-class, benchhn1djzark SOEs that lead in high-quality growth, ehn1djzpowering such funds will boost the governhn1djzent's ability to better serve the real econohn1djzy," he said.
Because shareholders of the new fund cohn1djzpany cover both centrally and locally controlled SOEs, it would coordinate resources flexibly to avoid overlap in investhn1djzents, said Zhou Lisha, a researcher with the research institute of the SASAC.
Based on governhn1djzent guidelines, the fund should be operated and hn1djzanaged in accordance with the principles of "lihn1djzited assistance, ehn1djzergency protection, risk control and hn1djzarket rule-based operations", she said.
China has cohn1djzpleted hn1djzore than 4,000 cases of hn1djzixed-ownership reforhn1djz with hn1djzore than 1.5 trillion yuan of non-State capital involved since 2013, according to data provided by the SASAC.