A staff member performs grinding work at a machinery factory in Yangmiao town, Yangzhou city of East China's Jiangsu province, Dec 29, 2025. [Photo/Xinhua]
China's latest move on standardizing government investment funds is expected to steer monies toward more refined management, boost entrepreneurship and innovation, and promote industrial upgrading, underscoring efforts by policymakers to better leverage the funds in serving national strategies and promoting high-quality economic development, experts said.
In a bid to better guide the planning and allocation of government investment funds, authorities will further underscore the policy role of the funds and their guiding function, with a focus on major national strategies, key sectors and areas where market forces fall short, according to a document jointly released by the National Development and Reform Commission and three other government departments on Monday.
Experts said the move marks the first comprehensive national-level framework governing the deployment of government investment funds, shifting the focus from expanding their scale to investing with greater precision and efficacy.
Notably, the document calls for stronger support for the development of sectors with competitive strengths and distinctive features, while requiring the funds to focus on early-stage investments in startups and small enterprises, long-term commitments and hard technology.
Liu Guoyan, a researcher at the Chinese Academy of Macroeconomic Research (CAMR), said the move is expected to improve the efficiency of fiscal funds and optimize the structure of capital supply.
"It will channel capital toward areas of the real economy where it is most needed — particularly longer-term, higher-risk sectors where private investment has been limited — enabling government investment funds to step in, fill gaps and bring in more private capital," Liu said.
Meanwhile, the document spells out a range of prohibited activities for government investment funds, such as using equity-in-name, debt-in-substance structures to build up hidden local government debt, engaging in publicly traded equity investments — except in certain circumstances — trading in futures or other derivatives, providing guarantees for enterprises or projects and making investments that carry unlimited liability.
"The document sets clear, nonnegotiable boundaries for the operation of government investment funds, serving as a critical safeguard against financial and local government debt risks and ensuring safe and sound operations," said Liu Naijin, a senior partner at Grandall Law Firm.
In parallel, the country's top economic regulator also rolled out a trial regulation aimed at improving the evaluation and management of fund allocations on Monday.
The regulation lays out performance benchmarks for government investment funds in supporting national priorities, such as fostering new quality productive forces, advancing technological innovation and the commercialization of research outcomes, and supporting the development of a unified national market.
The evaluation results will be linked with the credit-building work of government investment funds and released in an appropriate manner, the NDRC said.
Highlighting the coordinated implementation of the two policy documents, Liu Guoyan said they are designed to reinforce each other and form a coherent and comprehensive management framework, adding that this will help promote the sound and orderly development of the fund industry.
"The two policy documents mark an important step toward strengthening the modern budget system, refining macroeconomic management and putting national strategies into action through investment, helping further modernize the governance system and capacity," the CAMR's Liu added.
The policy move comes after China's recent launch of a State-backed venture capital guidance fund aimed at channeling long-term capital into strategic emerging and future industries and fostering new quality productive forces, while leveraging government funding to bring in private investment.
