The fund traders stayed up all night to revise the plan and bid farewell to the old-fashioned investment promotion KPIs.
At this juncture, the government investment fund industry has officially entered a new stage characterized by "regulated development, quality improvement, and efficiency enhancement." The industry emerged around 2010 and has played an important role in promoting industrial upgrading and technological innovation. However, it has also been accompanied by problems such as vague positioning and homogeneous competition.
On the evening of January 14, 2026, Shen Qing was still working overtime in her office. As the investment director of a provincial government investment fund management company, she was busy revising the draft investment strategy for the provincial fund in 2026.
At this moment, only two days had passed since the joint release of the "Work Measures on Strengthening the Layout Planning and Investment Guidance of Government Investment Funds" (hereinafter referred to as the "Work Measures") by four departments including the National Development and Reform Commission. After the release of the "Work Measures", Shen Qing started working overtime to study the document and think about how to adjust the investment direction. She told a reporter from Economic Observer that her core feeling was that both the "navigation device" and the "baton" had become clearer, but the requirements for the professional ability and execution accuracy of local funds had also become higher.
The "navigation device" that Shen Qing referred to is the systematic specification of the layout and investment direction of government investment funds made at the national level for the first time in the "Work Measures".
The "baton" she mentioned is the "Administrative Measures for the Evaluation of the Investment Direction of Government Investment Funds", which was released simultaneously with the "Work Measures". It will establish an evaluation system covering the entire process of fund operation, and the results will serve as an important basis for budget arrangements and the adjustment of fund continuation.
The busyness and adjustment of Shen Qing are just the first ripples caused by the new regulations in the field of local government investment funds. At this juncture, the government investment fund industry has officially entered a new stage characterized by "regulated development, quality improvement, and efficiency enhancement." The industry emerged around 2010 and has played an important role in promoting industrial upgrading and technological innovation. However, it has also been accompanied by problems such as vague positioning and homogeneous competition.
In the view of the relevant person in charge of the National Development and Reform Commission, the introduction of the new regulations aims to solve problems such as "mismatch with local resource endowments and industrial bases, unclear fund positioning, and homogeneous investment directions" of some government investment funds.
Under the new regulations, how will several local government investment fund "operators", invested enterprises, and cooperative management institutions like Shen Qing react and adjust? What new confusions and challenges are they facing? And what new possibilities are they exploring?
Wind Direction and Actions
As soon as the "Work Measures" were released, the "action - oriented" people in the field of local government investment funds began to get busy.
The "Work Measures" together with the simultaneously released "Administrative Measures for the Evaluation of the Investment Direction of Government Investment Funds" jointly constitute the core framework for the future operation of government investment funds. Its key points are concentrated in three aspects: First, clarify "where to invest", requiring funds to comply with major national plans and industrial catalogs, support major strategies, key areas, and weak links, and for the first time clearly define the different positions of national - level and local funds; Second, standardize "how to invest", emphasizing investing in early - stage, small - scale, long - term, and hard - technology projects; Third, improve the evaluation system of "who will manage", establish an evaluation mechanism covering the entire process of fund operation, and link the results with budgets, continuation, etc. In particular, the "division of labor between the central and local governments" and the "whole - process evaluation" are regarded as the most innovative and crucial aspects of the new regulations. The "Work Measures" clearly require that national - level funds should "base on the overall situation", while local funds need to "adapt to local conditions" and choose investment directions based on local industrial bases, focusing on supporting industrial upgrading, innovation capacity improvement, and the incubation of small and medium - sized enterprises.
More than a thousand kilometers away from Shen Qing, in Wuxi City, Jiangsu Province, a section chief of the Wuxi Financial Bureau revealed to a reporter from Economic Observer that since the General Office of the State Council issued the "Guiding Opinions on Promoting the High - quality Development of Government Investment Funds" in 2025, "the layout of S funds (Secondary Funds, private equity secondary market funds) in various places has significantly accelerated." The requirements in the new regulations for optimizing the layout and encouraging integration have provided a clearer policy basis for their planned S fund plan aimed at revitalizing the assets of existing funds.
The section chief said that the direction is correct, and now they need to speed up the implementation details. They are studying how to design the fund structure to attract social capital participation while ensuring that the funds ultimately flow to local key industries in line with the orientation of the new regulations.
Almost simultaneously with the release of the new regulations, the adjustment steps that some localities had already started are accelerating. In February 2025, Jiangxi Runxin Gantou Relay Fund, the first provincial - level S fund in Jiangxi Province, completed its registration. It took less than half a year from preparation to registration. The relevant person in charge of the fund told the reporter that the new regulations emphasize "optimizing the layout of productive forces" and "orderly integration", which is exactly the original intention of their establishment of the S fund to guide capital to focus on advantageous industries by acquiring existing shares.
Enterprises at the forefront of technological innovation have also felt the change in the wind direction.
Ma Xiaowei, the financing director of Chunjun New Materials (Shenzhen) Co., Ltd., was very excited about the statement in the new regulations of "investing in early - stage, small - scale, long - term, and hard - technology projects": "This gives a stronger signal to early - stage technology companies like us that focus on the R & D of cutting - edge materials. The government - guided capital will be more patient and firm in supporting real innovation."
The transmission of this "wind direction" is three - dimensional. On the one hand, provincial - level departments are quickly formulating "lists of key investment areas". On the other hand, municipal and district - level funds and state - owned enterprises have been adjusting their strategies accordingly.
Zhejiang has issued relevant implementation plans, clearly proposing to promote the pilot of equity investment share transfer. Manager Wang, an investment manager of a district - level state - owned capital operation platform in the local area, told the reporter that their recent work focus is to sort out the subsidiary funds and direct investment projects they participate in, "conduct a comprehensive 'physical examination' against the positive list (encouraged industries) and possible negative constraints of the new regulations, and prepare for subsequent optimization and possible integration."
This "calibration" action is also obvious among investment management institutions.
Economic Observer learned from a private equity institution in Shanghai that has long cooperated with government investment funds in many places that the institution held an internal meeting on January 15 to re - evaluate all managed and proposed investment targets. In the past, when cooperating with local governments, the institution sometimes faced short - term pressure of "investment promotion". The new regulations emphasize the "policy - oriented positioning" and long - term value, and the communication language between the institution and local government investors is becoming more consistent, which is conducive to making more pure and professional investment decisions.
From the formulation of lists by provincial - level departments, to the sorting out of funds by municipal and district - level platforms, and then to the re - evaluation of projects by market - oriented management institutions, a comprehensive and multi - level "benchmarking" and "calibration" around the requirements of the new regulations are being carried out simultaneously among all parties involved in government investment funds.
Running - in and Doubts
Despite the rapid actions, in the specific process of promoting the implementation of the new regulations, various real - world confusions and challenges have emerged. Among these problems, some are long - standing chronic problems in the industry. However, under the clear orientation and strict requirements of the new regulations, their solutions have become more urgent, and new manifestations have also emerged.
First and foremost, it is how to find a new balance between the long - standing policy goals and market - oriented operations under the new framework. Although this contradiction is not new, in the context of the new regulations strengthening the "policy - oriented positioning" and establishing strict "investment direction evaluation", how to design a mechanism that takes into account both policy goals and market returns has become a core issue that must be faced directly.
The relevant person in charge of Jinpu Industrial Investment Fund Management Co., Ltd. (hereinafter referred to as "Jinpu Investment") believes that there has long been a contradiction between policy goals and market - oriented profit goals. The government hopes for "investment promotion and project implementation" and "industrial guidance", while fund managers pursue returns, which easily leads to the deviation of investment directions from the original policy intentions.
Although the new regulations have strengthened the policy - oriented positioning and pointed out the direction for investment institutions, in actual operation, the balance point between "guidance" and "return" still needs to be groped for with difficulty.
The person in charge of a government investment fund in South China revealed his troubles to a reporter from Economic Observer: "The new regulations require us to 'invest in early - stage and small - scale projects', but early - stage projects have high risks and high failure rates. How can we establish a corresponding fault - tolerance mechanism and assessment system? This is a real problem that we must solve immediately after the new regulations put 'investing in early - stage and small - scale projects' in a more prominent position. If we simply evaluate based on financial returns, the team will have little enthusiasm; but if we completely ignore returns, the efficiency of fund use cannot be guaranteed."
Secondly, there may be a "deviation" between the traditional "KPI - oriented" approach in local economic development and the requirements of the new regulations for "adapting to local conditions" and "long - term cultivation".
Xiao Fei, the secretary - general of the Guangdong Venture Capital Association, pointed out in September 2025 that there is a obvious KPI - oriented problem in current local investment promotion in some places. The investment promotion departments only focus on short - term indicators such as "the number of introduced enterprises" and "the number of headquarters relocated", but ignore whether the enterprises can bring long - term tax revenue and GDP contributions.
The new regulations aim to correct this short - sighted behavior, but it is not easy to reverse the inertia.
A person from a government investment fund in a western province said: "There is a contradiction between the superior's assessment and the long - cycle of industrial cultivation. Of course, we know that cultivating local characteristic industrial clusters is more important, but it may take seven or eight years for a project to generate significant economic benefits from incubation, while some of our assessment cycles are still calculated on an annual or tenure basis."
Moreover, the "coordination between the central and local governments" and "differentiated development" emphasized in the new regulations still need to be clarified in terms of the specific coordination mechanism. How can national - level funds and local funds avoid investment overlap and form a relay and synergy?
The person from the investment fund in the western province mentioned above said: "The idea is good, but the communication cost is very high. National - level funds focus on the national layout and key technologies, while we focus more on whether the projects can form an industrial chain locally. Sometimes the key points of the projects that both parties are interested in are not completely the same, and it is very difficult to coordinate."
In addition, the integration and adjustment of existing funds involve a complex pattern of interests. Article 11 of the new regulations states that when there are many similar funds in the same region with obvious cross - overlap in investment areas, they should be adjusted in a timely manner in accordance with laws and regulations and withdraw in an orderly manner after the expiration of their term. The relevant person in charge of Jinpu Investment believes that this is an important measure to face the problem of existing funds directly.
However, local implementers are facing real problems.
Many funds were established at different times and led by different departments, with diverse investor structures. Some of the investors in these funds also involve social capital.
A person from the local finance system in Jiangsu frankly said that the word "integration" sounds simple, but in practice, it involves a series of complex issues such as liquidation, audit, and renegotiation of agreements, which requires high - level operational wisdom and a steady promotion rhythm.
These doubts and challenges in the running - in process indicate that there are still a large number of specific problems to be solved before a top - level design document can be transformed into feasible practices at the grass - roots level.
Juncture and Reconstruction
This is a crucial policy juncture that prompts all parties to rethink and reconstruct their positions and values in the government investment fund ecosystem.
For local government investment funds themselves, the core issue is how to find their own differentiated development path in the "national chessboard".
Wang Gongbin, the dean of the "China Venture Capital Research Institute", a third - party research institution, believes that the new round of regulations optimizes the layout planning, emphasizing the coordination between the central and local governments and differentiated development: National - level funds should "base on the overall situation" and "focus on the major and ignore the minor", while local funds need to "find their own positions" and "adapt to local conditions". This clear division of labor means a more scientific national layout.
Shen Qing reflected that in the past, some local government investment funds "took everything that came into their baskets", somewhat following the trend. When the semiconductor industry was hot, they all invested in semiconductors; when the new energy industry was booming, they flocked to new energy. Now the new regulations require them to combine with local industrial bases, which prompts them to transform into in - depth industrial research.
She asked herself: "What are our real advantages? Is it upstream raw materials, mid - stream manufacturing, or downstream application scenarios? Only when we figure this out can our investment be more accurate."
This exploration of "precision" germinated earlier.
Chen Mo, a senior practitioner in the government investment fund industry, said in an interview with the media that the original intention of the fund is to cultivate industries. In reality, it is hard to say that a fund is established just for investment promotion after its establishment. More often, it focuses on the local core advantageous industries to empower local development.
Shen Qing also holds a similar view: "Not aiming at investment promotion does not mean that funds cannot engage in investment promotion. Funds aim to invest in high - quality projects, which will objectively drive regional economic development." Under the framework of the new regulations, the value of this kind of "investment promotion" that naturally forms an agglomeration effect by empowering industries will be more prominent.
For the participating cooperative management institutions, the new regulations mean the deepening of the cooperation model. The simple role of fund management is changing to that of an "industrial partner". The person from the fund in the western province mentioned above said that they are forming a special "industrial empowerment team" to provide value - added services such as strategic planning, talent introduction, and market docking for invested enterprises. This person believes that local investors will value not only the investment vision but also the ability to help enterprises grow and drive local industries.
Liu Guoyan, a researcher at the Institute of Economics of the Chinese Academy of Macroeconomic Research, believes that the key directions and goals clarified in the layout planning and investment guidance are the core basis and benchmark for subsequent evaluations, which reflects "guiding evaluation with planning". The evaluation results and experience can provide empirical references and decision - making support for the optimization and adjustment of future fund layout and investment directions, achieving "feedback on planning with evaluation". The formation of this "planning - evaluation" management closed - loop is a sign that the industry is moving towards refined and scientific governance.
Some frontier practices have shown more effective explorations under the spirit of the new regulations. For example, in the field of data assetization, state - owned enterprises in many places such as Changsha, Changchun, Nanning, and Yangzhou have formed a value cycle of "data - assets - funds - data" through the confirmation of data resource rights, evaluation, accounting, and even financing. This kind of exploration conforms to the requirement of the new regulations to "promote the in - depth integration of technological innovation and industrial innovation" and provides a new model and tool for government investment funds to support technology - based enterprises with light assets and high growth potential.
Liu Guoyan summarized that this is a turning point from scale expansion to quality improvement. For every participant in local government investment funds, the introduction of the new regulations is not the end but a brand - new and more challenging starting point. How to steer the fund ship well under the clear "navigation" and strict "command" and cross the complex waters of the intersection of the market and policies to reach the other shore of cultivating industries and promoting innovation is just the beginning of the test.
(At the request of the interviewee, Shen Qing in the article is a pseudonym)
This article is from the WeChat official account "Economic Observer", author: Wang Yajie. It is published by 36Kr with authorization.