In a move aimed at strengthening the future of technology in the country, the Chinese government has established a fund worth 100 billion yuan (nearly $14.5 billion) to invest, nurture and support internet companies.
The government is also looking to help the country’s technological innovations and economic transformation into the oft quoted “Internet Plus” era.
The government has decided to call it the ‘China Internet Investment Fund.’
The fund has been established by bringing together funding from state-owned banks and companies, and oversight by the Cyberspace Administration of China (CAC) and the Ministry of Finance.
The first round of pitching for the funds ended up raising 30 billion yuan, while the second round raised another 150 billion yuan.
Various credit lines were opened by the Agricultural Bank of China, China Development Bank and Industrial & Commercial Bank of China.
The ICBC Bank has decided to invest 10 billion yuan directly into the fund.
With this, it is to become the biggest investor in this financing round. It has also become a strategic partner of the fund alongside Citic Guoan Group, China Post Insurance, China Mobile, China Unicom and China Telecom.
This fund shall be put to use by way of investing in equity stakes in China’s internet companies in a bid to make them bigger and stronger.
It shall also facilitate Premier Li Keqiang’s Internet Plus strategy which seeks to invigorate the Chinese economy through applying the IT to technology related industries.
China is the largest e-commerce market in the world, with an online shopping turnover of 3.8 trillion yuan last year.
The Chinese government wants to capitalize on this market in setting a goal to raise the e-commerce trading volume to 40 trillion yuan by 2020.
It also seeks to employing 50 million people in this process.
The government hasn’t commented on whether the fund would be used to fund non-state technology companies including Baidu Inc and Alibaba Group Holdings.