Tianjin to raise funds to develop new area
By Feng Jie (China Daily)
Updated: 2006-03-10 05:57
China's first industrial fund is likely to be set up soon in Tianjin, in
order to finance the development of a proposed national-level economic
development area, officials with the city said yesterday.
"Preparations are under way, and (the fund) will probably start operating
shortly," said Li Yali, director of the city's Development and Reform
The Bohai Industrial Fund is expected to raise 20 billion yuan (US$2.4
billion) from the public to fund the industrial development and infrastructure
construction of the Binhai New Area (BNA) to be set up in Tianjin. The first
issuance will total 5 billion yuan (US$617 million). A company will be set up to
manage the funds.
Li said the city is also planning a new reinsurance company to support the
growth of the BNA, but declined to give any further details.
"We are also going to establish a reinsurance company for the Binhai New
Area," he told China Daily. "We are still working on the plan."
Dai Xianglong, mayor of Tianjin, said the establishment of industrial funds
will help reduce the Chinese economy's heavy reliance on indirect financing, or
bank loans. The State has been trying to promote direct financing in recent
years, including the stock market and bond market.
The State Development and Reform Commission approved the proposal by Tianjin
last November to establish the nation's first mutual fund that invests in
industrial projects. Many mutual funds have been set up in recent years to
invest in the capital market.
Tianjin will also experiment with the trading of industrial funds, so that,
"through certain markets and trading platforms, (we can) make it become liquid,"
Pi Qiansheng, chairman of the BNA's Administrative Commission, said without
"We are drafting a plan, which will be submitted to the State Council for
approval," he added.
(China Daily 03/10/2006 page2)