By Chen Ning & Sun Fei, Research Team on “The Proper Role of Government Investment Funds in Promoting Transformation and Upgrading in China’s Economy”, Financial Research Institute, DRC

Research Report, Special Issue, No.61, 2019 (Total 1689) 2019-8-16

Abstract: In recent years, China’s government investment funds have developed rapidly, and the target size and capital-raising scale have reached the trillion level. With a large number of government investment funds gradually entering the late period or even exiting period since their establishment and the initial investment stage, how to effectively manage and evaluate the existing projects has become an urgent issue to be addressed. This paper analyzes and sorts out the current policy system and finds that there are still issues such as insufficient top-level design, decentralized policy system caused by multiple supervision, and deficient assessment and incentive mechanisms. The supervision system of government investment funds is suggested to be further improved at both national and local levels. Performance appraisal has to be separated from the current supervision system as soon as possible, to establish a comprehensive and multi-dimensional performance appraisal framework for fund management departments (government investment platform), fund managers (social professional GP), sub-funds and investment projects respectively, so as to realize the dual objectives of promoting economic transformation and upgrading and sustainable development of government funds.

Key words: government investment fund, effective supervision, performance appraisal