China sets up 100 billion yuan state fund to invest in the internet
The fund is cobbled from funding by state-owned banks and state companies
China’s government has established a 100 billion yuan (US$14.5 billion) state fund to invest, nurture and support internet companies and spearhead the country’s technological innovations and economic transformation into the so-called “Internet Plus” era.
The China Internet Investment Fund, launched in Beijing on Sunday, was cobbled together with funding from state-owned banks and companies, with oversight by the Cyberspace Administration of China (CAC) and the Ministry of Finance, according to a report by the Xinhua News Agency.
The first round of funding raised 30 billion yuan, while another 150 billion yuan of credit lines were offered by the Agricultural Bank of China, China Development Bank and the Industrial & Commercial Bank of China, Xinhua said.
Besides loans, ICBC will also invest 10 billion yuan directly into the fund, becoming the biggest strategic investor during its first financing round, the bank said in a press statement. It also became the fund’s strategic partner with state-owned Citic Guoan Group, China Post Insurance, China Mobile, China Unicom and China Telecom.
The fund will be used to invest in equity stakes among China’s internet companies to make them “bigger and stronger,” Xinhua said. It’s also aimed at facilitating Premier Li Keqiang’s Internet Plus strategy to invigorate the Chinese economy through applying the internet and other information technology-related innovations in conventional industries.
China, the world’s largest market for mobile phones, is also largest e-commerce market, with online shopping turnover topping 3.8 trillion yuan last year, according to iResearch Consulting Group.
The government wants to capitalise on that market, setting a goal to raise the e-commerce trading volume to 40 trillion yuan by 2020 employing 50 million people, a quarter of that from online retail business, according to the government’s 13th Five-Year Plan (2016-20).
The Xinhua report didn’t say if the state-run internet investment fund plans to invest in non-state technology companies including Baidu Inc, Alibaba Group Holdings or Tencent Holdings. Alibaba, operator of the world’s largest online shopping platforms, is owner of the South China Morning Post.