China has announced a $5 billion fund to help the small and medium-sized enterprises (SMEs) in the country, the media reported.
The Chinese ministry of Finance has teamed up the ministry of industry and information to launch the joint venture company called the National Small Medium Enterprises Development Fund.
According to media reports, the joint fund was set up in Shanghai on June 22, 2020.
The ministry of finance will reportedly hold a42.66 stake in the JV and will contribute with around $2.2 billion for the fund.
The remaining portion of the fund will come from a pool of investors which include China Tobacco, China Life Insurance, The People’s Insurance Company of China, Minsheng Road Asset Management, Guosheng Group, Shanghai ICY Capital, China Industry and Information Publishing and media Group among others.
The size of the fund is expected to further grow up to $14 billion once the funds are rolled out and it enters into new partnerships with SMEs in China.
Last month, Beijing’s Fengtai district also launched a 500-million-yuan special fund for relieving difficulties of SMEs as the coronavirus pandemic hit their businesses.
Other policies introduced include further rent reduction and exemption, supporting innovation eco-system, and employment aid, all aimed to help SMEs to return to stable growth.
The special fund targets SMEs with high potential in rail transit, aerospace, and other fields. The funds will be allocated through equity share, debt, and other means.
Back in 2015, China has also set up the National SME Development fund at $14 billion. The finance ministry injected around $2 billion into the fund.