JC Master Research | Attention: The National Development and Reform Commission is set to issue new regulations requiring government investment funds not to pursue investment promotion as their primary objective.

On July 30, the National Development and Reform Commission issued a public notice soliciting comments from the public on the “Guidance on the Layout Planning and Investment Directions of Government Investment Funds” (hereinafter referred to as the “Guidance”) and the “Measures for Strengthening the Guidance and Evaluation Management of Government Investment Fund Investments” (hereinafter referred to as the “Evaluation Measures”). The Guidance and the Evaluation Measures represent a concrete refinement and implementation of the requirements set forth in the “Guiding Opinions of the General Office of the State Council on Promoting the High-Quality Development of Government Investment Funds” (Guobanfa [2025] No. 1).
 

The author provides an analysis of the key provisions in the two documents:
 

1. Government investment funds are required not to pursue investment promotion as their primary objective, and are encouraged to lower or eliminate the requirement for reinvestment ratios.
 

Over the years, localities have established a growing number of investment‑attraction funds, with notably positive results. Compared with the traditional approach—where industrial development is secured through policy incentives—fund‑driven investment promotion leverages market‑based tools such as equity investments to draw enterprises and projects to a region. Moreover, these funds can exit via IPOs, M&A, or equity transfers, offering advantages that conventional industrial‑attraction strategies simply cannot match.
 

Many fund partnership agreements stipulate a reinvestment ratio, ranging from 1x to as high as 1.5x or even 2x. By leveraging fund investments for investment promotion, local governments and fund managers broaden their project pipelines and enhance opportunities for dialogue between local authorities and project developers.
 

However, some funds, in pursuit of attracting investment and meeting their reinvestment targets, have adopted a herd‑like approach, rushing into projects without proper due diligence. In some cases, fund managers have even been compelled to confine their investment scope to specific regions in order to align with local government priorities. As a result, these practices have undermined the original intent of government‑backed funds to support industrial development and have compromised the market‑oriented operation of the funds.
 

The “Work Guidelines” explicitly state that the establishment of government investment funds must align with the requirements for building a unified national market, refrain from pursuing investment promotion as an end in itself, and encourage the reduction or elimination of return‑investment ratios. At the Sixth Meeting of the Central Financial and Economic Commission held on July 1 this year, the fundamental principle of advancing the construction of a unified national market—“five unifications and one opening”—was clearly articulated: namely, unified basic market systems, unified market infrastructure, unified standards for government conduct, unified market regulation and law enforcement, and a unified market for production factors and resources, while continuously expanding both domestic and international openness. Accordingly, it has become imperative to standardize local investment‑attraction efforts, curb low‑price, disorderly competition among enterprises, and facilitate the orderly phase‑out of outdated production capacity.
 

2. Restrict the establishment of duplicate funds, encourage and promote fund consolidation and restructuring, and enhance economies of scale.
 

The Work Guidelines stipulate that, in principle, the same government shall not establish duplicate government investment funds within the same industry or sector; however, such funds may, in accordance with market‑based principles, pool resources and provide follow‑on support for the same project. With respect to industries and sectors already covered by government investment funds established prior to the issuance of these Guidelines, no new funds at the same level shall, in principle, be set up.
 

For government investment funds established prior to the issuance of these Work Guidelines whose investment priorities do not comply with the requirements set forth herein, and for cases where multiple similar funds operate in the same region with significantly overlapping investment scopes, such funds should, in principle, be phased out upon expiration of their term. At the same time, while safeguarding the legitimate rights and interests of operating entities and maintaining market order, relevant funds are encouraged to undergo consolidation and restructuring.
 

The foregoing provisions uphold the spirit of Document No. 1 [2025] issued by the General Office of the State Council, with the aim of promoting the consolidation and restructuring of funds to enhance economies of scale and better align with policy objectives. Meanwhile, for funds whose policy impact remains muted or whose fundraising and investment progress has been sluggish—owing to insufficient industrial foundations or inadequate resource endowments—efforts should be made to help them actively improve their effectiveness through measures such as optimizing their investment priorities.
 

3. The registration status of credit information for government investment funds shall be included as an evaluation criterion in investment‑direction guidance.
 

Following the issuance of these Work Guidelines, newly established or renewed government investment funds shall, within twenty business days of the receipt of their first paid-in capital, register the relevant information through the National Government Investment Fund Credit Information Registration System, which is managed by Central Government Bond Registration and Settlement Co., Ltd. Government investment funds that were established prior to the issuance of these Guidelines but have not yet completed registration shall do so within twenty business days after the Guidelines take effect. The status of credit information registration will be taken into account as part of the evaluation criteria for investment‑direction guidance.
 

This provision requires both new and existing government investment funds to register their information through the “National Government Investment Fund Credit Information Registration System,” and such registration will be linked to guidance and evaluation of investment allocation, serving as a component of the evaluation process.
 

4. Evaluation Indicator System
 

The evaluation indicator system stipulated in the Measures for Evaluation comprises three components: first, policy alignment indicators (weighted at 60%), which assess the consistency between the fund’s investment priorities and national major strategies, industrial development, and macroeconomic policy orientations; second, productivity‑layout optimization indicators (weighted at 30%), which evaluate the fund’s support for key national regional strategies, its alignment with provincial priority investment areas, and the effective utilization of production capacity; and third, policy‑implementation capability indicators (weighted at 10%), which assess the fund’s operational efficiency, the professional investment expertise of the fund manager, and risk‑control performance. These three overarching categories are further disaggregated into 11 specific indicators. Fund‑investment‑direction evaluations are conducted annually, with the National Development and Reform Commission guiding the Central Settlement Corporation to complete the prior year’s assessment by the end of the third quarter each year, based on information from the registration system.
 

As early as 2016, the National Development and Reform Commission (NDRC) included provisions on both a fund‑performance evaluation indicator system and a performance‑evaluation indicator system for fund managers in its Interim Measures for the Administration of Government‑Funded Industrial Investment Funds (NDRC Financial and Fiscal Regulation No. 2800 [2016]). In 2018, the NDRC further issued the Notice on Doing a Good Job in the Performance Evaluation of Government‑Funded Industrial Investment Funds (NDRC Office of Finance and Fiscal Affairs Document No. 1043 [2018]), which refined the evaluation indicators. The newly released Evaluation Management Measures represent a significant departure from the evaluation framework set forth in Document NDRC Financial and Fiscal Regulation No. 2800 [2016], with the new measures placing greater emphasis on assessing policy compliance in their weighting scheme.
 

5. Emphasize the roles of incentives and constraints
 

The Measures for Performance Evaluation require the adoption of measures such as adjusting management fees and allocating excess returns to strengthen the application of performance evaluation results, thereby reinforcing both incentives and constraints and enabling performance evaluation to serve as a guiding mechanism for fund operations and management.
 

For funds that rank highly in the evaluation results (hereinafter referred to as “top‑rated funds”), a comprehensive set of incentive measures will be implemented, including public commendation, demonstration and promotion, project推介, and provision of supporting resources. National‑level funds are encouraged to strengthen cooperation with local top‑rated funds in areas such as equity participation and project investment. Development and reform authorities at all levels will share lists of key government‑funded projects and high‑quality private‑sector investment projects with top‑rated funds, guiding financial institutions to increase complementary financing and reduce funding costs; they will also encourage financial asset management companies to give priority to partnering with these funds. Furthermore, relevant departments are advised to grant appropriate preferential treatment to top‑rated funds in terms of capital contributions, management fees, and profit distribution.
 

For funds that rank low in the evaluation results, the development and reform authorities, in coordination with relevant departments and according to the approval hierarchy, will strengthen guidance on investment priorities for the affected funds and, as appropriate, implement measures such as admonitory talks, public notifications, and issuance of warning letters to urge corrective actions. In addition, specific fund management agencies are advised to enhance their oversight and management of these funds, with adjustments—where warranted—in terms of the scale and proportion of capital contributions, management fees, and other related parameters.
 

Attachment: The full texts of the “Guidance on the Layout Planning and Investment Directions of Government Investment Funds” (Draft for Public Comment) and the “Measures for Strengthening the Guidance, Evaluation, and Management of Investment Directions of Government Investment Funds” (Draft for Public Comment).
 

Guidance on the Planning and Investment Direction of Government Investment Funds
 

(Draft for Public Comment)
 

To promote the sustained and sound development of the national economy, leverage the positive role of government investment funds in supporting national strategies, driving industrial upgrading, and fostering innovation and entrepreneurship, and guide localities to adjust their investment strategies in line with regional industrial development needs, this Guidance is formulated in accordance with the “Guiding Opinions of the General Office of the State Council on Promoting the High-Quality Development of Government Investment Funds” (Guobanfa [2025] No. 1). For the purposes of this Guidance, “national-level funds” refer to government investment funds established with funding from the State Council and directly affiliated departments and institutions of the central government, while “local funds” refer to government investment funds established with funding from provincial-level or lower‑level governments, or from their subordinate departments and directly affiliated institutions.
 

I. General Requirements
 

Guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, we will thoroughly implement the spirit of the 20th National Congress of the Communist Party of China and the Second and Third Plenary Sessions of the 20th Central Committee, fully, accurately, and comprehensively apply the new development philosophy, strengthen planning and guidance on the layout and investment priorities of government‑funded investment funds, emphasize their role in providing policy guidance and maintaining a policy‑oriented mandate, prevent homogeneous competition and crowding out of private capital, and foster a high‑quality development pattern for government‑funded investment funds that is appropriately scaled, rationally structured, professionally managed, scientifically efficient, and characterized by controllable risks.
 

In our work, we must: clearly define our strategic positioning, focus on policy objectives, and provide robust, effective support for major national strategies, key priority areas, and critical weak links where the market falls short, thereby better serving the overarching goals of national development; promote the transformation and upgrading of traditional industries, foster the growth of industries with distinctive strengths, and optimize the spatial allocation of productive forces; accelerate the cultivation and development of new‑type productive forces, further facilitate the commercialization of scientific and technological advances, and drive the deep integration of technological innovation with industrial innovation; while maintaining distinct investment priorities between national‑level funds and local funds, strengthen coordinated collaboration to attract and leverage additional social capital, creating synergies across the board.
 

II. Promote government investment funds to support key priority areas
 

(1) The investment areas of government‑funded investment funds shall conform to the encouraged industries listed in national industrial catalogs such as the “Guidance Catalogue for Industrial Structure Adjustment,” the “Catalogue of Industries Encouraged for Foreign Investment,” and the “Catalogue of Encouraged Industries in the Western Region.” They must also meet the specific requirements set forth in the guidelines on optimizing the layout and restructuring of the state‑owned economy, comply with national development plans as well as relevant national special‑purpose and regional plans, and clearly specify the priority investment sectors in the fund‑establishment proposal.
 

(2) National-level funds should adopt a holistic perspective, prioritize major initiatives while exercising flexibility on smaller ones, and focus on supporting the upgrading and quality enhancement of industries at the national level, tackling critical core technologies, and advancing large-scale cross-regional projects. They should address shortcomings in industrial development, break through bottlenecks in industrial foundations, and concentrate on a select few key areas to play a demonstrative and leading role. National-level funds are encouraged to strengthen coordination with local funds, leveraging local resource endowments in cutting-edge technological fields and critical links within industrial chains. This can be achieved through co‑establishing sub‑funds or making equity investments in local funds, thereby pooling financial resources and amplifying impact.
 

(3) Local funds must define their strategic positioning and, under the unified management of provincial governments, comprehensively assess local fiscal capacity, industrial resource endowments, debt‑related risks, and other relevant factors, selecting investment sectors that are tailored to regional conditions. For newly established local funds, direct‑investment projects or investments made through sub‑funds should prioritize industries with distinctive regional strengths, initiatives to enhance regional innovation capabilities, and support for the incubation and growth of small and micro‑enterprises as well as science‑and‑technology‑driven enterprises, thereby encouraging effective participation from social capital.
 

(4) Government investment funds should focus on expanding the supply of high-end production capacity, concentrating on industrial technological innovation and breakthroughs in critical core technologies, thereby accelerating the achievement of a high level of scientific and technological self-reliance and strength. Specifically, industrial investment funds should play a leading and catalytic role in industrial development, working to improve the modern industrial system by supporting the transformation and upgrading of traditional industries, fostering and scaling up emerging industries, and planning and building industries of the future. Meanwhile, venture capital funds should center on developing new‑type productive forces, investing in seed‑stage and early‑stage enterprises through market‑based mechanisms, while also providing support to small, medium, and micro enterprises at the early and mid‑stages, thereby bolstering technological innovation and addressing bottlenecks in key strategic areas.
 

III. Strengthening the Regulation of Investment Directions for Government Investment Funds
 

(5) Government investment funds shall not invest in industries classified as restricted or to be phased out under the Catalogue for Guiding Industrial Structure Adjustment, nor in any industrial sectors explicitly subject to regulatory restrictions as stipulated in relevant plans and policy documents. The establishment of government investment funds must align with the requirements for building a unified national market; such funds shall not be established for the purpose of attracting investment, and efforts should be encouraged to reduce or eliminate requirements for reinvestment ratios.
 

(6) The investment priorities of government‑funded investment funds shall be aligned with the state’s macro‑regulatory requirements for productive forces deployment, avoiding investments in industries characterized by structural imbalances. In emerging sectors, such investments should refrain from blind herd behavior and excessive, uncoordinated expansion. Instead, they should support enterprises in relevant industries to carry out mergers and reorganizations, accelerate technological upgrading and replacement, and promote the quality improvement and upgrading of industries.
 

(7) In principle, the same government shall not establish duplicate government investment funds in the same industry or sector; however, such funds may, in accordance with market‑based principles, pool resources and provide successive support for the same project. With respect to industries and sectors already covered by government investment funds established prior to the issuance of these Guidelines, no new funds at the same level shall, in principle, be set up.
 

(8) For government investment funds established prior to the issuance of this Guidance whose investment areas do not comply with its requirements, and for cases where multiple similar funds operate in the same region with significantly overlapping investment scopes, such funds should, in principle, be phased out upon expiration of their term. At the same time, while safeguarding the legitimate rights and interests of operating entities and maintaining market order, relevant funds are encouraged to undergo consolidation and restructuring.
 

(9) Government investment funds shall impose caps on the amount or proportion of investments made in any single enterprise, and such limits shall be clearly specified in the fund’s establishment plan or relevant legal documents. Government investment funds may not, by means such as equity‑in‑name‑but‑debt‑in‑fact arrangements, covertly increase local governments’ implicit debt. Except for mergers and acquisitions, restructuring, targeted share issuances, and strategic placements, they may not engage in publicly traded equity investments; they may not directly or indirectly trade futures or other derivative instruments; they may not provide guarantees for entities or projects other than the investee; and they may not undertake investments that entail unlimited liability. Where the fund regulatory authorities have otherwise prescribed requirements, those provisions shall prevail.
 

IV. Organizational Support
 

(10) During the approval process for the establishment of government investment funds at all levels, the development and reform authorities shall take the lead in conducting policy compliance assessments with respect to the targeted investment sectors, in accordance with the relevant approval hierarchy. The development and reform authorities shall issue supportive opinions for funds that comply with the investment guidelines and provide recommendations for adjusting the investment direction for those that do not meet the requirements.
 

(11) The development and reform authorities, in coordination with relevant departments, shall conduct guidance and evaluation of the investment directions of government investment funds. The specific measures for such guidance and evaluation shall be formulated separately by the National Development and Reform Commission in conjunction with the relevant departments.
 

(12) Each provincial development and reform department, in coordination with relevant departments, shall, in accordance with this Guidance, formulate a list of priority investment areas for the provincial government’s investment funds (hereinafter referred to as the “Provincial List”). Following approval by the provincial government, the list shall be filed with the National Development and Reform Commission by the end of 2025. The Provincial List shall serve as the basis for the provincial government to strengthen the regional allocation and investment orientation of its funds; it may be adjusted in accordance with established procedures based on local conditions and promptly filed with the National Development and Reform Commission, with adjustments generally limited to once per calendar year.
 

(13) The key investment areas listed in the provincial-level catalog shall be presented in a three-tier classification system, with the first- and second-tier classifications corresponding respectively to the “sectors” and “major categories” in the National Economic Industry Classification, and the third-tier classification further refined to specific industries that meet the relevant requirements set forth in this Guidance.
 

(14) Government investment funds newly established or renewed after the issuance of this Guidance shall, within twenty working days of the receipt of their first paid-in capital, register the relevant information through the National Government Investment Fund Credit Information Registration System managed by Central Government Bond Registration and Settlement Co., Ltd. Government investment funds that were established prior to the issuance of this Guidance but have not yet completed registration shall complete such registration within twenty working days of its issuance. The status of credit information registration will be taken into account in the evaluation of investment‑direction guidance.
 

(15) This Working Guidance shall be interpreted by the National Development and Reform Commission and shall enter into force as of the date of its promulgation. Where the CPC Central Committee and the State Council have issued separate provisions regarding the investment priorities of specific government investment funds, such provisions shall prevail.
 

Administrative Measures for the Guidance and Evaluation of Investment Directions of Government Investment Funds
 

(Draft for Public Comment)
 

To better leverage the positive role of government investment funds in serving national strategies, driving industrial upgrading, and fostering innovation and entrepreneurship; to attract and mobilize additional social capital to support the development of a modern industrial system and the cultivation of new‑type productive forces; and to promote the high‑quality development of government investment funds, the National Development and Reform Commission, together with relevant departments, has launched work to evaluate and guide fund allocation. In accordance with the requirements of the Securities Investment Fund Law, the Regulations on the Supervision and Administration of Private Equity Investment Funds, and the Guiding Opinions of the General Office of the State Council on Promoting the High‑Quality Development of Government Investment Funds (Guobanfa [2025] No. 1), these Measures are hereby formulated.
 

I. General Requirements
 

Guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, we will thoroughly implement the spirit of the 20th National Congress of the Communist Party of China and the Second and Third Plenary Sessions of the 20th Central Committee, fully, accurately, and comprehensively apply the new development philosophy, and give full play to the guiding and standardizing role of investment‑direction guidance and evaluation in the operation and management of funds. This will help foster a government‑funded investment system that is appropriately scaled, rationally structured, well‑managed, scientifically efficient, and risk‑controlled, thereby enabling government‑funded investments to better serve the overarching national development agenda. The management of guidance and evaluation shall adhere to the following basic principles.
 

(1) Highlight the fund’s strategic positioning and foster a closer synergy between an efficient market and a proactive government. Building on the market’s decisive role in resource allocation, government investment funds emphasize their guiding and policy‑oriented mandate, focusing on policy priorities to provide robust and effective support for major national strategies, key sectors, and areas where market forces fall short. They aim to attract and leverage additional private capital, bolster the development of a modern industrial system, accelerate the cultivation of new drivers of productivity, and promote the deep integration of technological and industrial innovation. In sectors requiring long‑term planning, these funds can better leverage their capacity as long‑term, patient capital to deliver counter‑cyclical and cross‑cycle stabilization, thereby enhancing the continuity of investment.
 

(II) Emphasize tiered and categorized approaches, leveraging the combined strengths of funds at all levels to forge new drivers of industrial development. Fully harness the exemplary and leading role of national-level funds in fostering new industries, new business models, and new growth engines, while addressing bottlenecks in industrial development. Further unlock the guiding role of local funds by encouraging them to align with regional resource endowments and industrial foundations, selectively supporting emerging industries, future-oriented sectors, the digital economy, and other key projects that advance the development of new‑type productive forces. Strengthen coordinated planning and synergistic collaboration between national and local funds, and enhance financial support for priority national industrial sectors.
 

(3) Emphasize incentive and constraint mechanisms to promote the optimization of industrial layout and the strengthening of industrial regulation. By guiding government investment funds to allocate capital to, or withdraw from, sectors that are either encouraged by national policies or subject to regulatory restrictions, we will both support and restrain certain industries, thereby enhancing and refining industrial oversight. We will strictly prevent local governments from using government investment funds as a disguised means of subsidizing overcapacity‑prone sectors, thus averting redundant investments and disorderly competition. Furthermore, we will provide guidance and oversight to ensure that localities, based on evaluation outcomes, rationally coordinate fund deployment, standardize and improve the operational management and investment decision‑making frameworks of government investment funds, and fully extend incentive‑and‑constraint mechanisms to funds at all levels and their managers, thereby better mobilizing the enthusiasm of all stakeholders.
 

II. Fund Investment Direction Evaluation Methodology
 

(4) [Scope of Evaluation] The subjects of evaluation include government investment funds and their fund managers that are funded through budgetary allocations, with funds disbursed and entrusted to state-owned enterprises for investment, as well as funds that have received capital injections from state-owned enterprises and whose dedicated funds are explicitly earmarked for investment in such funds, and which are managed in accordance with relevant requirements governing government contributions. Furthermore, these funds must have completed credit information registration in the National Government Investment Fund Credit Information Registration System (hereinafter referred to as the “Registration System”), which is administered by Central Government Bond Registration and Settlement Co., Ltd. (hereinafter referred to as “Central Settlement Company”), and have been operating normally for at least one year.
 

(5) [Evaluation Process] Investment‑direction evaluations are conducted on an annual basis. The National Development and Reform Commission directs the Central Depository & Clearing Co., Ltd. to complete the previous year’s fund investment‑direction evaluation by the end of the third quarter each year, based on information from the registration system. The evaluation process comprises two phases: preliminary review and feedback. During the preliminary review phase, the Central Depository & Clearing Co., Ltd., drawing on data from the registration system, promptly notifies the national-level fund‑management authorities and the provincial development and reform departments of any issues identified—such as non‑compliant investment directions or incomplete registration information—according to the relevant approval hierarchy. In the feedback phase, the provincial development and reform departments, in coordination with the specific fund‑management agencies, may instruct the relevant fund managers to provide explanations, supplementary information, and updates on corrective actions to the Central Depository & Clearing Co., Ltd. within the prescribed time limit; they may also submit clarifications for force‑majeure circumstances. Information that has been verified and issues that have been rectified, upon conofficeation by the National Development and Reform Commission, will no longer be subject to point deductions in the evaluation.
 

(6) [Fund Credit Information Registration] Within four months after the end of each fiscal year, development and reform authorities at all levels, in coordination with the relevant fund management departments, shall supervise the respective fund managers to update and refine the prior year’s fund‑related information in the registration system. Fund managers shall ensure that the registered information is accurate and complete, and shall provide a written commitment to its veracity.
 

(7) [Evaluation Indicator System] The National Development and Reform Commission, in coordination with relevant departments, has established an evaluation indicator system that emphasizes policy orientation in fund allocation, covers the entire process of fund operation and management, and combines quantitative and qualitative assessments (see appendix). This system is dynamically adjusted in response to the latest directives from the CPC Central Committee and the State Council, as well as evolving macroeconomic policy orientations. The evaluation indicators encompass three main dimensions: first, policy alignment indicators, which assess the extent to which fund allocations support key industries, new‑type productive forces, scientific and technological innovation, the development of a unified national market, green development, employment and people’s livelihoods, and venture capital; second, investment‑allocation optimization indicators, which evaluate the implementation of national regional strategies, the degree of alignment with provincial lists of priority investment areas, and the effectiveness of resource utilization; and third, policy‑implementation capability indicators, which measure both the efficiency of fund deployment and the investment expertise of fund managers.
 

(8) [Strengthening Restrictions Based on the Negative List] A negative‑behavior list for investment‑target sectors is established in the fund‑evaluation framework (see the appendix). Funds found to have engaged in any of the listed adverse practices will not be subject to investment‑target evaluation for the current year, and appropriate restrictive measures will be imposed in accordance with Article 12 of these Measures. For government‑funded investment funds that were established prior to the issuance of these Measures and whose investment‑target sectors do not comply with the requirements set forth in the Work Guidelines, they shall, in principle, phase out upon expiration of their term. At the same time, while safeguarding the legitimate rights and interests of operating entities and maintaining market order, efforts should be encouraged to promote the consolidation and restructuring of such funds.
 

III. Application of Fund Investment Evaluation Results
 

(9) [Publication of Evaluation Results] By the third quarter of each year, the National Development and Reform Commission shall, in an appropriate manner, communicate the investment‑direction evaluation results—after they have been conofficeed by the provincial governments—to the provincial governments, relevant departments, and the fund managers participating in the evaluation. The Central Depository & Clearing Co., Ltd., in accordance with the requirements of the National Development and Reform Commission, shall publish the evaluation results through the registration system. The provincial development and reform authorities shall, in turn, transmit the evaluation results to their subordinate governments and to the specific fund management agencies.
 

(10) [Application of Evaluation Results] The National Development and Reform Commission, in coordination with relevant departments, will integrate the application of evaluation results into such efforts as credit-building and performance assessment for government investment funds. In accordance with laws and regulations, it will strengthen mechanisms for rewarding good faith and sanctioning breaches of trust in the field of government investment funds.
 

(11) [Incentive Measures] For funds that rank highly in the evaluation results (hereinafter referred to as “Award‑Winning Funds”), a comprehensive package of incentive measures will be implemented, including public commendation, demonstration and promotion, project推介, and provision of supporting resources. National‑level funds are encouraged to strengthen cooperation with local Award‑Winning Funds in areas such as equity participation and project investment. Development and reform authorities at all levels shall provide these Award‑Winning Funds with lists of key government‑funded projects and high‑quality private‑sector investment projects, guiding financial institutions to increase complementary financing and reduce financing costs; they should also encourage financial asset management companies to give priority to partnering with Award‑Winning Funds. Furthermore, relevant departments are advised to grant appropriate preferential treatment to Award‑Winning Funds in terms of fund contributions, management fees, and profit distribution.
 

(12) [Remedial Measures] For funds ranked lower in the evaluation results, the development and reform authorities, in coordination with relevant departments and according to the approval hierarchy, shall strengthen guidance on investment direction for the concerned funds and, as appropriate, impose measures such as admonitory talks, public notifications, or issuance of warning letters to urge corrective actions. Furthermore, the specific fund management agencies are advised to enhance their oversight and management of these funds, with adjustments—where warranted—in terms of the fund’s capital contribution scale, shareholding ratio, management fees, and other related aspects.
 

IV. Strengthening Organizational Implementation and Assurance
 

(13) [Strengthening Accountability] The National Development and Reform Commission, in coordination with relevant departments, will enhance overall planning and coordination, ensure accountability at all levels, and guide local authorities and related agencies in organizing and implementing fund‑allocation planning, investment‑direction guidance, and performance evaluation. Through a combination of on-site supervision and online monitoring, it will conduct spot checks and verifications on fund‑raising and investment projects, the status of corrective measures, and compliance with credit‑information registration requirements.
 

(14) [Communication and Feedback] The National Development and Reform Commission, in coordination with relevant departments, shall dynamically adjust the evaluation indicator system in light of actual conditions and guide the Central Depository & Clearing Co., Ltd. in carrying out policy publicity and interpretation, training and exchanges, as well as the optimization and upgrading of its registration system. The development and reform authorities shall establish a regular communication and feedback mechanism to promptly address the legitimate demands and concerns of fund managers.
 

These Administrative Measures shall be interpreted by the National Development and Reform Commission and shall enter into force as of the date of their promulgation. In the event that the CPC Central Committee or the State Council has issued other provisions, such provisions shall prevail.
 

Attachment: Investment Orientation Evaluation Indicator System (Click “Read the Original” at the bottom left of the article to view it)

(This article reflects the author’s personal views and is intended solely for informational purposes; it does not constitute legal advice or an interpretation of the law by JC Master Law Office. This disclaimer is hereby made.)