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The Development of Government Investment Fund: Problems and Policy Options(No. 8, 2018)


By Sun Fei, Research Institute of Finance, DRC

Research Report No. 8, 2018 (Total. 5283) 2018-1-11

Abstract: The government investment fund in China is an important means to leverage social capital and improve the efficiency in the use of fiscal fund. In recent years, the government investment fund has witnessed a swift growth both in number and scale, which has played an important role in promoting innovation and entrepreneurship and improving the development of key industries, and has achieved certain results. But some problems still remain to be addressed. For instance, the mismatching of project resources and fund size has led to low efficiency, the inconsistent appeals of fund participants have induced increased potential risks, the performance is related with homogenization and fragmentation, the professional management level is yet to be improved, and the supervision and performance evaluation system needs to be promoted. To solve these problems, first, we need to improve the coordination and management mechanism to increase the operation efficiency; second, we need to straighten out the relations between financial capital and social capital fund participants, so as to prevent and dissolve potential risks; third, we need to strengthen the construction of supervision system, and establish the performance evaluation system giving consideration to both policy benefits and economic benefits as well as social satisfaction and enterprise satisfaction; fourth, we need to design differentiated government investment fund development plans in light of local conditions.

Key words: the government investment fund, efficiency, risks