The Chinese government will give money to some venture capital investment firms in its latest effort to boost the development of what it labels strategic emerging industries.
According to a new policy published by China's Ministry of Finance over the weekend, the government is prepared to be a minority shareholder in a venture capital fund if the fund focuses on start-ups in designated sectors from environment protection to new-energy vehicles.
The policy, co-developed with China's economic planning agency, is meant to "accelerate the implementation of emerging industry investment plans", the finance ministry said.
The central government will contribute up to 20 percent to such a fund, with the remainder being financed by local governments and other investors.
Funds that receive government money must invest no less than 60 percent in small start-ups in designated industries.
Critics have alleged that Beijing's zealous push for "indigenous innovation" and industrial upgrading has often been undermined by corruption, inefficiency and over-capacity.
The high-speed railway equipment sector, which was once treated as a strategic area for investment, has suffered a serious setback after a deadly train accident in July.
Beijing warned clearly in the latest rules that public money must be used properly.
Venture capital funds receiving government money cannot invest in stocks, futures or bonds, and are prohibited from offering loans, credit guarantees or property investment.
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