Guangdong’s government has outlined several recent initiatives aimed at encouraging investment in the province, supporting local enterprises and increasing the amount of spending.
In a policy document published on 2 February, Guangdong’s Department of Finance said that one of these initiatives was the establishment of a 100 billion yuan (US$14.41 billion) Guangdong Provincial Strategic Emerging Industry Investment Guidance Fund, with the fund’s initial value set at 50 billion yuan (US$7.2 billion).
The long-term fund distinguishes itself from past funds through three innovative features – in positioning, structure and mechanism.
According to the policy document, the fund long-term, with no fixed term of existence and only one shareholder – the Department of Finance. It is intended to serve as a unified investment and management platform for the provincial government’s guiding funds, helping to support the provincial party committee and provincial government’s efforts to fast track the development of modern industrial systems.
Meanwhile, the fund adopts a three-tier structure that consists of a guiding fund, a fund of funds and a sub-fund. This set-up is meant to allow the fund to better attract social capital and drive private investment, in addition to fostering effective coordination of local funds, industry policy and development plans.
In terms of mechanism, the guidance fund features 10 mechanisms, including those that relate to supervision and inspection, resource sharing, policy investment and the correction of errors.
[See more: Guangdong unveils new policies to improve the region’s business environment]
Aside from the fund, Guangdong authorities have also introduced loan interest subsidies for firms in the manufacturing and high-technology sectors. Companies with eligible loans are entitled to a subsidy of up to 35 percent, with the limit capped at 20 million yuan (US$2.88 million) per year.
The subsidies are intended for firms taking out loans for practical purposes such as constructing a factory, purchasing equipment and conducting R&D. To streamline the distribution of the funds, the Guangdong branches of 21 national banks are part of the scheme, allocating the subsidies to the recipient every quarter.
Similar interest subsidies are also in place for small and medium-sized enterprises, the seafood farming sector and protected agriculture.
Meanwhile, measures for agriculture insurance subsidies, financing guarantee and risk compensation were discussed as well.
Guangdong’s latest business guidelines comes after the Chinese Ministry of Finance unveiled in January four measures designed to support SMEs and boost consumer spending in the country. The 500 billion yuan programme included interest subsidies of 1.5 percent for SMEs over a two year period.
Last Monday, Guangdong authorities also made clear their intention to bolster the province’s economy through three plans designed to make its business environment more market-oriented, law-based and internationalised.
