The fund overseen by the Cyberspace Administration of China and Ministry of Finance will support the Internet Plus action plan.
Earlier this week, on 22 January, the Chinese government announced the launch of a 100 billion Yuan (~US$14.6 billion ) Internet investment fund.
The Cyberspace Administration of China and Ministry of Finance will oversee the fund. The fund will support Internet companies and the Internet Plus Action Plan via equity investment, according to the Industrial and Commercial Bank of China (ICBC), one of the largest investors in the fund.
ICBC has invested 10 billion Yuan (~US$ 1.5 billion) in the fund. According to the media release, 30 billion Yuan (~US$ 4.4 billion) has been raised from State-owned banks and enterprises.
In addition, ICBC, together with the China Development Bank and the Agricultural Bank of China, will provide financial services and 150 billion Yuan (~US$ 22 bilion) of credit to selected enterprises.
This fund would feed into the Chinese government’s broader strategy for making ICT technologies one of the key drivers of economic growth. In August 2016, China launched a 200 billion Yuan (US$30 billion) state-controlled venture capital fund, financed by China Construction Bank Corporation, China Reform Holdings Corporation Ltd. (CRHC), the Postal Savings Bank of China and Shenzhen Investment Holding Co., Ltd to support innovation and technology upgrading in centrally-administered state firms. According to a Bloomberg report in March 2016, the country’s government-backed (central and local) venture funds raised about 1.5 trillion yuan ($231 billion) in 2015, dwarfing venture capital in the private sector. and opened 1,600 high-tech incubators for startups.
According to the China Internet Network Information Center (CNNIC), China’s Internet population reached 731 million during 2016 (accounting for over 20% of total global internet users), with 695 million of them using mobile devices. The Internet already accounted for 7% of China’s Gross Domestic Product (GDP) in 2014, a percentage point higher than the US. The Chinese online retail market had also exceeded the US to become the world's largest.
The word ‘Internet’ occurs 90 times in the 13th Five-Year Plan for Economic And Social Development Of The People’s Republic Of China for the period, 2016-2020. ‘Developing Modern Internet Industries’ is one of the sections under ‘Developing the Cyber Economy’ part in the Plan ( the part has 3 other sections or chapters, Building Ubiquitous, Efficient Information Networks, Implementing the National Big Data Strategy and Strengthening Information Security). It primarily talks about the Internet Plus Action Plan.
The Action Plan was revealed by the Chinese government in July 2015, aiming to integrate the Internet with traditional industries, and create a new engine for economic growth. It involves bringing together mobile Internet, cloud computing, big data and the Internet of Things (IoT) with modern manufacturing, to encourage the development of e-commerce, industrial networks, and Internet banking, and to help Internet companies increase their international presence.
Read the media release here.
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