In­ter­net fund aims to boost in­no­va­tion

Ini­tia­tive is of great sig­nif­i­cance for the de­vel­op­ment of the sec­tor, say an­a­lysts

China Daily European Weekly - - Business - By OUYANG SHIJIA ouyang­shi­jia@chi­

The newly-es­tab­lished China In­ter­net In­vest­ment Fund is ex­pected to foster in­no­va­tion and en­trepreneur­ship within the in­ter­net sec­tor via a mar­ket ap­proach, an­a­lysts said on Jan 23.

The 100 bil­lion yuan ($14.6 bil­lion; 9.8 bil­lion eu­ros; £8.7 bil­lion) in­ter­net in­vest­ment fund, co-spon­sored by the Cy­berspace Ad­min­is­tra­tion of China and the Min­istry of Fi­nance, was launched over the weekend.

Six strate­gic part­ners — in­clud­ing In­dus­trial and Com­mer­cial Bank of China Co, CITIC Guoan Group Co, China Post Life In­sur­ance Co and China’s three ma­jor tele­com car­ri­ers — have funded the first 30 bil­lion yuan.

Three state-owned banks — ICBC, China De­vel­op­ment Bank and Agri­cul­tural Bank of China Co — will pro­vide fi­nan­cial ser­vices and 150 bil­lion yuan of credit for en­ter­prises which have raised money from the in­ter­net in­vest­ment fund.

“Based on mar­ket op­er­a­tions, the fund aims to cul­ti­vate and pro­mote a new driv­ing force in the in­ter­net sec­tor,” says Deputy Fi­nance Min­is­ter Yu Weip­ing.

Shen Meng, di­rec­tor of Chan­son & Co, a bou­tique in­vest­ment bank in China, says the es­tab­lish­ment of the State-backed fund is of great sig­nif­i­cance for the de­vel­op­ment of the in­ter­net sec­tor and the In­ter­net Plus in­dus­try.

“It will bring new op­por­tu­ni­ties for all parts of the in­ter­net sec­tor. “

A re­port pub­lished by the China In­ter­net Net­work In­for­ma­tion Cen­ter dur­ing the World In­ter­net Con­fer­ence in Wuzhen last year showed that China’s global rank­ing among coun­tries with a strong in­ter­net­based in­dus­try had moved up to 25 in 2016 from 36 in 2012, with a score of 72.8 out of 100, sur­pass­ing the av­er­age of G20 economies for the first time.

Shen added that as China stepped up ef­forts on eco­nomic re­struc­tur­ing and up­grad­ing, the gov­ern­ment aimed to boost the de­vel­op­ment of In­ter­net Plus by bankrolling in­no­va­tive com­pa­nies.

“The fund has sev­eral ad­van­tages, such as abun­dant money and sup­port­ive poli­cies. How­ever, it will take on risks for higher yields,” he adds. One an­a­lyst urges cau­tion. “They should in­vest in firms and projects of real value to avoid bub­bles in the in­no­va­tion field,” says Li Zichuan, an an­a­lyst at Bei­jing-based in­ter­net con­sul­tancy Analysys.

Xiang Li­gang, CEO of tele­coms in­dus­try web­site cc­, says the fund also aims to bet­ter man­age cy­berspace.

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