In a bold move to sharpen its competitive edge, China unveiled stringent guidelines for government investment funds on December 12. The joint directive from the NDRC, Finance Ministry, Science and Technology Ministry, and Industry and Information Technology Ministry introduces ‘Working Measures’ that institutionalize fund management for the first time.

These measures tackle three pillars: investment locations, methods, and oversight. Comprising 14 detailed provisions, they aim to fix market gaps by channeling funds into national priorities, vital industries, and weak links.

Key to the layout optimization is promoting tech-industrial fusion, growing cutting-edge sectors, and following ‘early, small, long-term, tech’ investment norms. This approach is designed to supercharge innovation where private markets hesitate.

Investment directions are tightly aligned with national blueprints and promoted industries, while explicitly banning flows into prohibited areas. National funds will lead in constructing advanced industrial frameworks, pioneering core tech advancements, and remedying sectoral frailties.

They’ll also dismantle growth barriers and nurture enduring innovative prowess. Locally, funds must reflect regional strengths, embrace unified national markets, and focus on upgrades, innovation enhancement, SME backing, and tech firms. Boosting social capital involvement and PPP models is emphasized to amplify impact.

As China navigates economic headwinds, these measures promise a more targeted, effective use of public funds, fueling sustainable industrial transformation and long-term prosperity.