China will establish a national fund worth 200 trillion won to support innovative corporations in science and technology. It has also decided to create a market dedicated to science and technology bonds and expand related policy loan budgets to a maximum of 200 trillion won. Along with these policies, China conveyed the message that "the stronger the oppression and blockade, the faster independent innovation must accelerate." The more the United States hits China, the more resources China will invest to demonstrate its determination to win the technological hegemony war against the U.S.
On the 6th, the head of the National Development and Reform Commission (NDRC), which is responsible for macroeconomic policies in China, stated at a joint press conference of economic ministries held at the press center of the Two Sessions (National People’s Congress and the Chinese People’s Political Consultative Conference) that they will "cultivate and expand emerging industries and future industries" and that "soon we will establish the National Startup Investment Guidance Fund (国家创业投资引导基金) to make innovative corporations excellent, strong, and large." He also added that they would mobilize approximately 1 trillion yuan (about 199.6 trillion won) of local funds and social capital. The fund will have a duration of 20 years.
The main investment sources are expected to be early corporations in advanced technology fields such as artificial intelligence (AI). Chinese economic media outlet Caixin reported that "this fund will mainly encourage early investments from financial capital, small-scale investments, long-term investments, and investments in hardcore technology (high-tech with high entry barriers)" and that it will focus on AI, quantum technology, hydrogen energy storage, and other advanced fields, supporting original and disruptive technological innovation and core technology research through market-based investments in small and medium-sized corporations. Technologies such as embodied intelligence (artificial intelligence that has a physical entity and interacts with the real environment), 6G, and humanoid robots were also mentioned as potential investment targets for the fund.
It has also been decided to further expand funding options for science and technology corporations through bonds and loans outside of the fund. To this end, the People's Bank, the central bank, has decided to establish a "science and technology board" within the bond market to issue science and technology innovation bonds. Governor Pan of the People's Bank emphasized that they will support bond issuance by three main entities: financial institutions, technology corporations, and private equity institutions, aiming to enrich the product system of science and technology innovation bonds.
Specifically, they have decided to support the issuance of science and technology-related bonds by financial institutions such as commercial banks, securities companies, and financial investment firms to expand funding methods such as science and technology loans, bond investments, and stock investments. Growth-stage and mature technology corporations will also be able to directly issue medium- to long-term bonds, making it easier to secure funds for research and development (R&D) investments, project initiation, mergers and acquisitions (M&A), and restructuring. Private equity firms and venture capital firms will be encouraged to issue long-term science and technology innovation bonds in order to allow more funds to flow into the early stages of each corporation and technology.
Support for the existing re-lending policy for science and technology corporations will also be strengthened. Governor Pan stated that "to more effectively meet the funding needs of corporations, we will expand the re-lending scale from the current 500 billion yuan (about 99.8 trillion won) to between 800 billion and 1 trillion yuan (about 159.6 trillion to 199.6 trillion won)" and emphasized that they would lower interest rates and strengthen policy incentives for banks to significantly expand the scope of policy application.
On this day, the heads of China's economic ministries indirectly criticized the U.S. policy of blocking Chinese technology. Director Zheng remarked that "many scenes we used to see in science fiction movies have become a reality, and China is steadily advancing to the forefront of global science and technology innovation" and that "all of this proves that the more we face oppression and blockade, the faster we must accelerate independent innovation." Governor Pan also commented, "We welcome international investors to invest in Chinese technology corporations" and expressed opposition to the instrumentalization and politicization of market-based investment activities and the establishment of inappropriate investment barriers.