Tech war: China’s hi-tech state fund grows to over US$8 billion in self-sufficiency drive
- The National Fund for Technology Transfer and Commercialisation had pumped tens of billions of yuan into hundreds of enterprises, state media reported
- China has long used state-level financing to boost major industries, an effort that has become more urgent amid intensifying rivalry with the US
By the end of 2022, the National Fund for Technology Transfer and Commercialisation (NFTTC) had set up 36 sub-funds to pump nearly 36 billion yuan into 616 enterprises, and had helped turn 974 scientific and technological achievements into profit-oriented projects, the Beijing-based Economic Information Daily reported on Wednesday.
Established by the Ministry of Science and Technology and the Ministry of Finance, the NFTTC supports efforts by national and local governments and public institutions to commercialise their new technologies, products, materials and devices.
The NFTTC makes investments along with other institutional investors, including private equity funds and local government-backed funds, according to guidelines published on its official website.
The national fund is required to keep its total investments in all sub-funds between 20 to 30 per cent. It is barred from being a major shareholder in any sub-fund. The key investment direction must be in China’s hi-tech sectors, such as digital information, biomedicine, aerospace and new materials, the guidelines said.
Over the past decades, China has been using state-level financing to shore up major industries. Those efforts have become increasingly urgent as the country races to reduce reliance on foreign technology amid intensifying rivalry with the US.
The NFTTC made its largest capital injection in December 2021, when it set up a sub-fund with the governments of southern Guangdong province, central Hubei province, southwestern Chengdu city and a number of financial institutions.
Totalling 15 billion yuan, the sub-fund is expected to invest in projects involving advanced manufacturing, electronic information, materials and biomedicine, according to Chinese media reports.
Local governments in the country are also ramping up investments into hi-tech companies.