Original Title: Implementation Opinions of the Municipal Government on Building Nanjing’s “4+N” Industrial Fund Cluster to Jointly Promote the Development of an Industry-Driven City
To the People’s Governments of All Districts, the Administrative Committee of Jiangbei New Area, All Municipal Commissions, Offices, and Bureaus, and All Municipal Directly Affiliated Units:
To fully implement the decisions and arrangements of the Municipal Party Committee and Municipal Government regarding the development of a strong industrial city, further leverage the leading and catalytic role of state-owned enterprises and fiscal funds, and better promote the construction of a strong industrial city in our municipality, the following opinions are hereby put forward regarding the establishment of Nanjing’s “4+N” industrial fund cluster and the concerted efforts to drive the development of a strong industrial city.
I. General Requirements
(1) Guiding Principles
Guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, we will fully implement the spirit of the 20th National Congress of the Communist Party of China and the Third Plenary Session of the 20th Central Committee, as well as the important speeches and instructions made by General Secretary Xi Jinping during his inspection tour of Jiangsu and the relevant requirements for developing new-quality productive forces. Focusing on our city’s “2+6+6” innovative industrial clusters,we will strengthen synergy among funds of different types, with different functional orientations, and at different investment stages. This will facilitate the implementation of a number of major industrial projects, attract and cultivate a group of leading enterprises and industry leaders, and provide strong support for our city’s accelerated development as the primary hub for a globally influential industrial science and technology innovation center and a national-level science and technology innovation financial reform pilot zone.
(2) Basic Principles
— Adhere to market-oriented operations with government guidance. Properly handle the relationship between government-backed funds and market-oriented funds, promoting a close integration of an effective market and an active government.Government investment funds shall strictly comply with relevant management requirements; state-owned enterprise investment funds, while adhering to state-owned asset supervision regulations, shall fully leverage the decisive role of the market in resource allocation. The government will strengthen top-level design for industrial development, optimize the industrial development environment, increase fiscal and state-owned capital support for the cultivation of venture capital institutions, actively guide various types of capital to establish funds to enhance effective investment in strategic emerging industries, continuously stimulate industrial development potential and the vitality of market entities, and promote the development of a city strong in industry.
——Focus on priorities with professionalism and efficiency. Closely aligning with the key industries, sectors, and projects identified in the “Industrial Strength City” strategy, we will comprehensively build a “multi-tiered, specialized, and full-cycle” fund cluster system. We will fully leverage the role of venture capital in investing early, in small-scale enterprises, and in hard technology. Through the operation and management of professional fund management institutions, we will support the development of the main hub for the Industrial Science and Technology Innovation Center and the Science and Technology Innovation Financial Reform Pilot Zone.
— Adhere to standardized management and risk prevention. Improve internal control and external supervision systems for state-owned enterprise funds and government investment funds; optimize decision-making processes; strengthen performance evaluation and incentives; refine full-cycle management covering pre-investment, during-investment, and post-investment phases; establish due diligence exemption and error-tolerance mechanisms; strengthen debt risk prevention and control; resolutely avoid creating new hidden debt; and ensure the healthy and stable operation of investment funds.
(3) Main Objectives
By integrating resources from all parties to form a fund with an asset scale of 30 billion yuan, we will focus on four key directions: the implementation of major projects, the development of key industries, strengthening, supplementing, and extending industrial chains, and the cultivation of science and technology innovation talent. We will leverage various forms of social capital to establish N funds, striving to form a “4+N” industrial fund cluster with a total scale exceeding 200 billion yuan, and build a fund investment system that provides “full coverage of key industries and services throughout the entire lifecycle.”
II. Key Tasks
(1) Building the “4+N” Industrial Fund Cluster
Adhering to the principle of balancing market-oriented and functional approaches, we will integrate the city’s existing and incremental resources to build an industrial fund cluster centered on the four key directions in accordance with the requirements for strengthening the city’s industrial base.
1. Investment in Major Projects. Emphasizing “investing in large-scale projects, industrial chains, and key sectors,” we will encourage municipal state-owned enterprises such as Nanjing Innovation Investment Group Co., Ltd. (hereinafter referred to as the Innovation Investment Group), as well as various districts (development zones), to establish major project funds. These funds will support and facilitate the establishment of major projects in our city that have a leading role, such as those led by industry chain leaders, headquarter enterprises, and central state-owned enterprises.(Responsible Units: Innovation Investment Group, Municipal Development and Reform Commission, Municipal Investment Promotion Bureau, Municipal State-owned Assets Supervision and Administration Commission, Municipal Industry and Information Technology Bureau, Municipal Science and Technology Bureau, Municipal Commerce Bureau, relevant district governments, and relevant development zone management committees)
2. Investment in Key Industries. Focusing on the key industries identified in the “Industrial Strengthening of the City” initiative, we will encourage industry regulatory authorities, the Venture Capital Group, and other municipal state-owned enterprises to initiate and establish key industry funds. We will strengthen cooperation with specialized investment institutions in high-tech sub-sectors to foster the development of a group of specialized, refined, distinctive, and innovative “Little Giant” enterprises. By integrating investment and recruitment efforts, we will promote the integrated development of strategic emerging industry clusters and optimize the layout of the modern industrial system.(Responsible Units: Venture Capital Group, Municipal Party Committee Financial Affairs Office, Municipal Development and Reform Commission, Municipal Bureau of Industry and Information Technology, Municipal Science and Technology Bureau, Municipal Investment Promotion Bureau, Municipal Transportation Bureau, Municipal Commerce Bureau, Municipal Culture and Tourism Bureau, Municipal Sports Bureau, relevant district governments, and relevant development zone management committees)
3. Chain-Strengthening M&A Investment. Focusing on the acquisition of high-quality enterprises and the coordinated implementation of major projects, we will encourage municipal state-owned enterprises such as the New Industry Group, as well as listed companies and leading enterprises in key industrial sectors, to establish chain-strengthening M&A funds to expand their core businesses and accelerate the development of the real economy. (Responsible Units: Venture Capital Group, New Industry Group, Municipal Development and Reform Commission, Municipal State-owned Assets Supervision and Administration Commission, relevant municipal-level groups)
4. Investment in Science, Technology, and Innovation Talent. Focusing on new fields and emerging sectors, encourage municipal state-owned enterprises such as the Venture Capital Group and Southeast Group, as well as industry regulatory authorities, to initiate the establishment of science and technology innovation funds and talent funds. Adhere to the principles of “investing early, investing in small-scale ventures, investing in talent, and investing in hard technology,” directing investments toward science and technology innovation enterprises, technology transfer projects, talent-driven startup projects, and university-led startup projects in Nanjing.(Responsible Units: Venture Capital Group, Southeast Group, Municipal Development and Reform Commission, Municipal Science and Technology Bureau, Municipal Talent Office)
(II) Building a World-Class Innovation Investment Platform
We will thoroughly implement the Action Plan for Deepening and Enhancing State-Owned Enterprise Reform, coordinate relevant funds and assets to continuously increase capital for the Venture Capital Group, and encourage the Venture Capital Group to issue corporate bonds and debt financing instruments. We will support the Venture Capital Group in becoming stronger, better, and larger, so that it can better play its exemplary and leading role as a municipal-level state-owned venture capital platform. (Responsible Units: Venture Capital Group, Municipal State-owned Assets Supervision and Administration Commission, Municipal Finance Bureau)
The Venture Capital Group will accelerate the cultivation of high-quality venture capital institutions, encourage leading enterprises in the industry, research institutions, and innovation and entrepreneurship platforms to participate in fund investments, focus on its core responsibilities and main business, fulfill key functions in industrial investment and capital operations, serve as a guide for industrial investment and a facilitator for the integration of industry and finance, and actively build an innovative industrial investment management and operation platform with national influence. (Responsible Unit: Venture Capital Group)
Strengthen cooperation with higher-level funds. As the initiator of the provincial-municipal cooperative fund, the Venture Capital Group will take the lead in liaising with the Jiangsu Provincial Strategic Emerging Industries Mother Fund and be responsible for establishing the provincial-municipal cooperative strategic emerging industries fund. (Responsible Unit: Venture Capital Group)
(3) Establish an Organizational Structure with Clear Roles and Responsibilities
1. Joint Conference on Promoting the Clustered Development of Industrial Funds (hereinafter referred to as the Joint Conference). Establish a joint conference mechanism comprising the Municipal Party Committee’s Financial Affairs Office, the Municipal Development and Reform Commission, the Municipal Science and Technology Bureau, the Municipal Industry and Information Technology Bureau, the Municipal Finance Bureau, the Municipal Commerce Bureau, the Municipal Investment Promotion Bureau, the Municipal State-owned Assets Supervision and Administration Commission, the Municipal Audit Bureau, relevant district governments, relevant municipal state-owned enterprises, and the Venture Capital Group.
2. Working Bodies of the Joint Conference. The Joint Conference shall establish a Comprehensive Coordination Group, an Investment Advisory Group, and an Assessment and Evaluation Group.
The Comprehensive Coordination Group shall be led by the Municipal Development and Reform Commission. It shall be primarily responsible for soliciting and compiling opinions and suggestions from Joint Conference member units and relevant parties regarding major project investment plans and key fund establishment proposals, and submitting them to the Mayor’s Executive Meeting for review and deliberation in accordance with procedures; supervising the Venture Capital Group to improve fund management systems and fulfill its duties regarding regular reporting and reporting on major matters; managing the daily operations of the Joint Conference; and liaising with the Comprehensive Coordination Group of the Provincial Strategic Emerging Industries Mother Fund Joint Conference.(Responsible Unit: Municipal Development and Reform Commission)
The Investment Advisory Group is led by the Municipal Bureau of Industry and Information Technology, with participation from the Municipal Development and Reform Commission, the Municipal Science and Technology Bureau, the Municipal Commerce Bureau, and the Municipal Investment Promotion Bureau. Member units include the Venture Capital Group, relevant municipal-level groups, and relevant district governments. It is primarily responsible for researching and proposing recommendations on key investment directions for the fund; and liaising with the Investment Advisory Group of the Provincial Strategic Emerging Industries Mother Fund Joint Conference.(Responsible Units: Municipal Bureau of Industry and Information Technology, Municipal Development and Reform Commission, Municipal Science and Technology Bureau, Municipal Commerce Bureau, Municipal Investment Promotion Bureau, Venture Capital Group.)
The Performance Evaluation Group is led by the Municipal Finance Bureau and the Municipal State-owned Assets Supervision and Administration Commission (SASAC), with participation from the Municipal Party Committee Financial Affairs Office and the Municipal Audit Bureau. It is primarily responsible for organizing and implementing performance evaluations and oversight of government investment funds and state-owned enterprise investment funds on a categorized basis. (Responsible Units: Municipal Finance Bureau, Municipal SASAC, Municipal Party Committee Financial Affairs Office, Municipal Audit Bureau)
3. Industrial Fund Cluster Management Agency. The Venture Capital Group is responsible for establishing the industrial fund cluster management agency. Its primary responsibilities include: implementing investment activities for the “4+N” industrial fund cluster; fulfilling the duties of the initiator for provincial-municipal cooperative funds; formulating internal control system documents; coordinating the preparation of the annual budget and investment plan for the “4+N” industrial fund cluster; and making decisions on major project investments and the establishment of key funds in accordance with laws and regulations, as well as organizing their implementation. (Responsible entity: Venture Capital Group)
III. Investment Operations and Post-Investment Management
(1) Building Investment Synergy
Actively seek financial support from national and provincial sources, and strengthen cooperation among central state-owned enterprises, the province, the city, and the district in areas such as fund establishment, investment promotion, project investment, industrial mergers and acquisitions, and talent development. Encourage the integration of long-term capital such as insurance funds and social security funds, mobilize qualified social capital to serve as patient capital for venture capital investments, and explore cooperation with overseas investment institutions to form a concerted investment effort for forward-looking, strategic, and major industrial projects.
(2) Improving the Fund System
Fully leverage the resources of high-quality fund management institutions. Aligning with the practical needs of various industrial sectors, optimize the city-wide layout for fund establishment and investment. Support municipal state-owned enterprises in leveraging their strengths to attract national-level funds, capital from central and provincial state-owned enterprises, and banking and insurance funds to participate in the city’s fund cluster system. Through a “fund + direct investment” model, collaborate with leading industry fund management institutions to establish various market-oriented funds, leverage diverse capital sources, and build a distinctive industrial fund system that underpins the city’s industrial strength.
(3) Innovating Investment Methods
Establish and improve an interactive mechanism between investment promotion efforts and fund investments to facilitate the implementation of key investment projects. Flexibly utilize investment methods such as convertible bonds, private placements by listed companies, and negotiated transfers of listed company shares. Collaborate with financial institutions to conduct business such as investment-lending linkage and financial leasing, and seek relevant policies to form a “combined strategy” of investment promotion and investment. Attract more high-end, outstanding talent to Nanjing to start businesses, and appropriately relax investment conditions for particularly outstanding enterprise founding teams.
(4) Optimizing Exit Policies
Broaden fund exit channels and support exit methods consistent with industry characteristics and development patterns, such as IPO, private placement, public transfer, M&A, and the transfer of venture capital secondary market fund shares. Support the development of M&A funds and venture capital secondary market funds (referred to as “S funds”), and encourage policy incentives for newly established S funds registered within the jurisdiction and filed with the Asset Management Association of China.
(5) Strengthening Risk Prevention and Control
Strictly enforce external regulatory systems for funds, standardize fund investment behavior, and enhance risk prevention capabilities. Fund management institutions must foster a risk prevention mindset, strengthen internal controls, and establish robust risk prevention mechanisms across all stages of “fundraising, investment, management, and exit.” They should effectively utilize external expert resources—including independent third-party industry experts, risk control experts, and investment experts—to enhance risk identification capabilities and improve the quality of fund operations.
(6) Strengthen Coordination and Collaboration
Optimize the development environment for the venture capital industry; establish and improve mechanisms for the coordinated management of fund investments; strengthen interdepartmental collaboration and policy synergy; establish mechanisms for matching venture capital with innovation and entrepreneurship projects and for information sharing; continuously improve the supporting policy framework and management service system for industrial investment; and consistently implement and refine tax incentive policies to support the development of specialized institutions.
(7) Establish a Mechanism for Tolerance of Failure and Exemption from Liability
In accordance with the principle of “distinguishing three categories,” we will uphold the protection of reform, encourage exploration, tolerate failure, and correct deviations. For those who actively implement the decisions and deployments of the Municipal Party Committee and Municipal Government, comply with relevant management regulations, follow prescribed investment decision-making procedures, act with due diligence, and do not seek personal gain, we will exempt them from relevant liability in accordance with laws and regulations when fund operations or project investments fail to meet expectations or result in losses.
(8) Establish a Categorized Performance Evaluation Mechanism
A differentiated performance evaluation mechanism shall be established. Taking into account actual circumstances such as fund type, functional positioning, and investment stage, an overall performance evaluation shall be conducted for functional mother funds; the profitability of individual investment projects shall not be evaluated. The evaluation shall focus on policy effectiveness, economic benefits, and the extent to which industrial investment has been stimulated. Municipal state-owned enterprises shall conduct separate evaluations for investment matters carried out in accordance with the provisions of these Implementation Guidelines.
IV. Supplementary Provisions
These Implementation Guidelines shall take effect on the date of issuance. Government investment funds shall be administered in accordance with the “Implementation Guidelines on the Implementation of the Jiangsu Provincial Government Investment Fund Management Measures and Related Supporting Systems.” Other market-oriented funds independently initiated and established by municipal state-owned enterprises shall be administered in accordance with state-owned asset supervision requirements.
