Industrial fund is a policy fund funded by the government to attract all kinds of social capital to participate in industrial development through equity or bonds, also known as industrial development fund or industrial investment fund. In China, as an important part of the government investment fund, the purpose of establishing and operating industrial fund is to give play to the leverage effect of fiscal funds, overcome market failure, and guide the development of strategic emerging industries and the transformation and upgrading of traditional industries. This kind of capital arrangement will help accelerate the industrialization of research and development results, upgrade the technological level of the industry, foster leading enterprises in emerging industries, and form a new driving force for economic development.

However, in recent years, some prominent problems have been exposed in the use and management of industrial funds, which are mainly reflected in the excessively rapid expansion of fund scale. By July 2019, China had set up 2,090 industrial funds, with a total target size of 11.6 trillion yuan. At present, the industrial funds launched by prefecture-level governments are the largest, accounting for nearly one third of the target size of the national industrial funds, and the national funds account for about 16%. The average target size of the national fund is 60.1 billion yuan, much higher than that of the provincial level (10.25 billion yuan), the prefecture-level level (6.73 billion yuan) and the district-level level (3.14 billion yuan). At the same time, industrial funds account for 50% more of the government investment funds at the current stage. Both in size and quantity, industrial funds have greatly surpassed the venture capital investment guidance funds and government and social capital cooperation (PPP) funds. Fund size, rapid expansion of industry in a relatively short period of time become the governments at all levels, especially the important means of local governments to support the development of the industry, but also lead to departments, local governments and enterprises of the policy tools have a certain path dependence, in some places there are even "development of an industry to set up a fund", due to various industry fund, system, severe fragmentation, confused management difficulties, make its role in strategic emerging industries guiding, leading, move the policy guidance have weakened. Due to the unsound evaluation mechanism of industrial fund investment effect, under the current assessment guidance, the managers constantly strengthen the risk aversion preference, which leads to the unreasonable investment of some funds and too much emphasis on the "backward" support of industrial development. In addition, some industrial funds are set up or injected by government bonds. The management method is not transparent, the level of market-oriented operation is low, and the use efficiency needs to be improved.

Industrial fund is not a policy tool initiated by China, but a product of the practice of developed countries. The United States and other countries have established industrial funds for nearly 60 years. On the whole, industrial funds in developed countries have been in operation for a longer time and are more experienced, with many mature and effective measures. It should be emphasized that the industrial fund established in developed countries insists on legislation first, and its original intention of policy is to solve two core problems: first, to share the market risk of industrialization of cutting-edge scientific and technological achievements, so as to meet the capital needs of small and medium-sized science and innovation enterprises; Second, identify and select high-quality start-up companies with "high economic benefits" and "high social returns", leverage social capital, and attract more market players to participate in the development of emerging industries. Based on this policy orientation, the industry fund should help the emerging industry to "ride the boat" with the start-up enterprises, rather than "pick the peach" for the mature projects with bright profit prospects. Generally speaking, industrial funds of developed countries have a small scale in investment in emerging industries, and they are more likely to leverage fiscal funds by borrowing industrial funds. For example, the government of the United States contributed less than 3 percent of the relevant industry funds, Europe and Japan are about 5 to 7 percent. Even in Israel, which operates on a state-led model, the state does not account for more than 10 per cent of the industry's funds. Fund at the same time, while developed countries industries guiding significant, but its total capital ratio in the financing system of the whole society is limited, not for the development of emerging industry leading financing, private equity funds, angel funds, venture capital funds and other kinds of marketization of higher capital to emerging industry development effect is more outstanding, and the benign interaction between and industry fund. In addition, the industry long-term funds to small and medium-sized enterprises in the developed countries and the so-called "before the competition" technology, strict limits on the government to the enterprise capacity formation and expansion of direct intervention, fund operation process more transparent, compliance and marketization, manifests the government subsidies "reboot, qiao" characteristics of the modern industrial policy.

From the point of effect, establish industry fund in our country, makes the government at all levels from "enterprise" to "capital", to some extent, realized with preferential, subsidies and tax administrative alternative and relatively strong industrial support measures, in a more flexible and more diversified, more leverage equity investment, improve the degree of marketization of industrial policy tools, its function and role of credit. However, it should be realized that in the process of learning from developed countries, there are still outstanding problems in the establishment, management and effect evaluation of China's industrial funds. To this end, we should stand in promoting the modernization of national management system and management ability of height, comply with the global industrial competition and the new changes of international rules, insist to bring into full play the decisive role of market in resource allocation, promote industry fund to healthy, sustainable development, in the supplement industry development board, "winning high-level industrial base, industrial modernization" in the process of play a bigger role.

First, we should strengthen the functional orientation of industrial policies and transform the way the government supports industries. For industrial funds selectivity, "rent-seeking" phenomenon, the allocation efficiency is not high, should be in the comprehensive assessment of the current industrial policy and government investment fund compliance, on the basis of focus on the "difference" new pattern of new forms of new technology and new industry policy requirements, government support the idea of industry development and further innovation, gradually in the universality and functional policy tools instead of the fiscal traditional means such as direct subsidies, for subdivision industry all kinds of market main body, the consumers of new products to provide standard and transparent policy is favorable, adopt diversified compliance measures, to improve industrial policy effect.

Second, we will improve the entry and exit mechanisms for industrial funds, and coordinate the integration of various types of funds. We will further clarify the positioning and role of industrial funds, strengthen the review and control of the budget for government contributions, and rectify problems in the establishment, operation and management of funds, blindly following the trend, and pursuing the size and quantity of funds. Around to considering its own location condition, industrial upgrading direction and project resources, reasonable fund quantity and scale, focus on solving the problem of funds dispersed, to repeat, etc, to guide all kinds of funds to form resultant force, promote the large-scale comprehensive investment and small special support to cooperate with each other, balancing profitability projects and public welfare projects investment direction, to realize the benefits and risks across projects and across regions. We will establish a scientific and dynamic entry threshold and exit mechanism for industrial funds of different types and levels, promote the orderly connection between high-quality policy resources and high-quality government services, and effectively improve the overall quality and landing rate of fund investment projects.

Third, we will strengthen the integration of industrial funds' policies with market forces and improve their operation efficiency. The establishment of industrial funds must take into account the policy objectives and the real market demand. Supporting policies, on the one hand, perfecting funds through moderate ease restrictions on fund investment area, the possible measures of social capital, raise funds for all kinds of capital attraction, arouse the enthusiasm of participation in social capital, the formation of financial capital, state-owned capital, private capital, common development and efficient governance fund shareholding structure. For industrial funds with strong policy, the multiple can be reduced appropriately to increase the proportion of government investment, while for funds with strong commercial power, a higher amplification multiple can be set. On the other hand, we will make orderly arrangements for the withdrawal of various government subsidies and industrial funds from competitive industries, and reduce the investment of industrial funds in "post-competition" sectors such as production capacity formation and scale expansion in emerging industries. Should not only through the government "absence" of emerging industries and major projects prophase feasibility analysis, scientific layout, share the market risk, and the industrial fund management and investment operation must be left to professional management departments and personnel, do the government "offside", to achieve effective coordination with government and promising market.

Fourth, we need to build an open and transparent performance evaluation system and create a policy atmosphere of fair competition. We will speed up the establishment of an open and transparent performance evaluation system for industrial funds, introduce multi-dimensional evaluation indicators covering the extent to which policy objectives have been achieved, the coverage of small and medium-sized enterprises and r&d enterprises, the composition of investment and operation projects, and the effectiveness of investment. We will introduce detailed rules for performance evaluation, and resolutely eliminate "black box" operations in fund allocation. Considering the emerging industry technology research and development and industrialization projects generally have the characteristics of the early losses, later get investment profit, in the annual fund performance evaluation of an industry at the same time, can consider to place more targeted on different stages of investment appraisal standard, the incentive management will pry power industry fund to lead and large projects. We should attach importance to the combination of internal control and external supervision, introduce independent third-party evaluation agencies to improve the fairness and fairness of investment performance evaluation, strengthen the operation of industrial funds and the disclosure of performance evaluation information, and create a fair, impartial and open policy environment for promoting the development of various industries.

Source: China social science network