The Wuhan provincial government has set up a 50-billion-yuan (US$7.64 billion) guiding fund for the development of its Donghu high-tech zone, also called Optics Valley, with the aim of driving more than one trillion yuan of investment into the area, Yicai.com reported.
The government will lead the utilization of the fund at the beginning, while the following operations will be market-oriented and be led by private entities.
According to the report, the fund will not be limited to investing in projects in the Optics Valley, which is China’s biggest photoelectron information industry centre. It will instead launch investments all over the world.
In recent years, the number and scale of government-sourced guiding funds have been growing rapidly. By the end of 2016, there were 901 guiding funds set up by local governments, totalling 2.4 trillion yuan.
Different from private venture capital or overseas funds, which tend to engage in startup projects at the mid-late stage, government guiding funds are mainly early funds, venture capital funds and growth funds. The funds mainly focus on sectors such as health care, artificial intelligence, TMT and other emerging industries.