By Sun Fei, Research Team on “Give Proper Play to the Role of Governmental Investment Fund to Accelerate Economic Transformation and Upgrading”, Research Institute of Finance, DRC

Research Report, Special Issue, No.64, 2019 (Total 1692) 2019-8-16

Abstract: Affected by economic and industrial environment changes, China’s governmental investment fund is undergoing some adjustment after a period of fast development. Some problems that used to be covered by scale expansion have gradually loomed up, such as difficulty in fund-raising, weak investment inclination and low efficiency in fund operation. The problems mentioned above have much to do with some governmental investment fund entities who are not clear about the related concepts, connotations and development goals. This paper, based on the analysis on the connotations, goals, functions and mechanisms of governmental investment fund, proposes that the fund is the outcome resulting from the joint innovation of industrial, fiscal and financial policies. Being a policy tool, it needs to take a market-based approach and realize specific policy targets so as to accelerate economic transformation and upgrading. To promote the long-term sustainable development of China’s governmental investment fund and bring into play its due role in pushing ahead with the realization of industrial development and other policy targets, some major principles need to be followed. For example, it is advisable for the government to play a guiding role instead of a leading one, and the focus needs to be placed on industrial progress rather than financial development.

Key words: governmental investment fund, policy tool, eight major principles