In­vest­ment fund to aid startups

China Daily (Canada) - - FRONT PAGE - By ZHAO YI NAN and MO JINGXI Con­tact the writ­ers through zhaoy­i­nan@chi­

China will set up a 40 bil­lion yuan ($6.45 bil­lion) in­vest­ment fund to support startups in emerg­ing in­dus­tries, part of gov­ern­ment ef­forts to nur­ture new growth en­gines amid the slow­est eco­nomic ex­pan­sion in almost 25 years.

The fund­ing will come mostly from the gov­ern­ment, which will com­bine ex­ist­ing funds for in­fra­struc­ture con­struc­tion and emerg­ing in­dus­tries, though large com­pa­nies and fi­nan­cial in­sti­tu­tions will also con­trib­ute, the ex­ec­u­tive meet­ing of the State Coun­cil presided over by Premier Li Ke­qiang de­cided on Wed­nes­day.

A state­ment re­leased after the meet­ing said fund man­age­ment com­pa­nies will be se­lected through pub­lic bid­ding and will be the sole decision-mak­ers in in­vest­ment. Non­govern­ment in­vestors will have a pri­or­ity in the dis­tri­bu­tion of div­i­dends.

The ex­ec­u­tive meet­ing was the last for­mal State Coun­cil gath­er­ing be­fore China re­leases its an­nual GDP fig­ure next week, which is pre­dicted to be around 7.3 per­cent, the slow­est growth in a quar­ter­century.

The gov­ern­ment is count­ing heav­ily on emerg­ing in­dus­tries to boost eco­nomic growth, as its heavy in­dus­try is be­ing hit by ef­forts to re­struc­ture the econ­omy and curb pol­lu­tion.

The tra­di­tional heavy in­dus­trial base in the north­east ranked in the bot­tom five of China’s 31 prov­inces for GDP growth in the first three quarters of last year, as the re­gion painstak­ingly trans­forms into a mod­ern man­u­fac­tur­ing cen­ter.

Tong Youhao, an of­fi­cial from the China Cen­ter for Pro­mo­tion of Small and Medium-Sized En­ter­prises De­vel­op­ment, said the gov­ern­ment-led fund could ease the bor­row­ing dif­fi­cul­ties for startup com­pa­nies in emerg­ing in­dus­tries and en­cour­age more non­govern­ment cap­i­tal to invest in the field.

“With this fi­nan­cial support, com­pa­nies with good projects will be able to put more ef­fort into re­search and de­vel­op­ment,” Tong said.

Wed­nes­day’s meet­ing also de­cided to grant for­eign in­vestors wider ac­cess to fi­nance, ed­u­ca­tion, cul­ture and med­i­cal care in­dus­tries. Ad­di­tion­ally, free trade in the ser­vice sec­tor be­tween the main­land and Hong Kong and Ma­cao will be ac­cel­er­ated, the state­ment said.

The de­vel­op­ment of the high-end and high val­ueadded ser­vice in­dus­try, es­pe­cially in trans­porta­tion, telecom­mu­ni­ca­tion, and re­search and de­sign, will be en­cour­aged to strengthen com­pet­i­tive­ness

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