China’s Ministry of Finance has launched the first government- sponsored private equity fund – the China Culture Industrial Investment Fund, to invest in China’s cultural industries, including film and TV, Internet content and publishing.
Established by the Ministry of Finance, Bank of China International, China International Television Corp and Shenzhen International Cultural Industry Fair Co, the fund aims to raise a total of $3bn (RMB20bn) with the first year raising $927m. Bank of China International will serve as manager of the fund.
According to Wang Taihua, director of the China Culture Industrial Investment Fund, the fund will primarily invest in film and TV, Internet content and publishing, with the aim to encourage privately investment companies or investors to invest in the cultural industry. Wang was former director of State Administration of Radio, Film and Television (SARFT), China’s highest-leveled government unit on film and entertainment policies.
Explaining the main reason for the Chinese government to establish the fund, Li Yong [pictured], China’s vice-minister of Finance said the fund was intended to ease the problem of raising finance in the cultural industries.
Chen Shaofeng, professor of Peking University’s Institute of Cultural Industries, commented that the establishment of the fund signifies the Chinese government has placed the development of the cultural industries as a national strategy and is taking the lead to pour money into the cultural industries.
The fund marks a step further for the Chinese government to proactively develop the country’s entertainment industries. In January 2010 China’s State Council released its Guidelines on Stimulating Film Industry Development, which proposed seven major goals and ten measures to be achieved by the end of 2015, including to improve the investment environment of the film industry as well as to expand digital cinemas and increase the overall revenue of the film industry.
At the beginning stages, the Culture Industrial Investment Fund has already settled deals to invest in two state-owned companies, China Publication Group and Xinhuanet.com.