National venture capital fund to drive innovation

China will establish a national venture capital guidance fund to bolster the development of innovative enterprises, the country's top economic regulator said on Thursday, as the country looks to foster new quality productive forces and pursue innovation-driven growth.

"In the near future, we will establish a national venture capital guidance fund, with the goal of enhancing, strengthening and expanding innovative enterprises," Zheng Shanjie, head of the National Development and Reform Commission, told a news conference held in Beijing during the ongoing two sessions.

The initiative came after the Government Work Report, released on Wednesday during the annual meeting of the National People's Congress, the country's top legislature, specified that the country will strive to develop new quality productive forces in light of local conditions and accelerate the development of a modernized industrial system, requiring properly handling the relationships between fostering new growth drivers and upgrading old ones.

On the upgrade of traditional industries, Zheng said the country will introduce sector-specific policies to phase out outdated production capacity while expanding the supply of mid-to-high-end capacity, in a bid to ensure that supply better adapts to changes in market demand.

Despite facing headwinds from rising external uncertainty, sluggish domestic demand, and operational challenges for some industries and companies, Zheng said he is "fully confident" that China has the foundation and condition to achieve the around 5 percent annual growth target this year.

"Our institutional strengths, market potential, and corporate vitality provide a strong foundation. More importantly, we have the courage to face risks and challenges head-on, and the confidence to tackle problems," he added.

As part of efforts to spur domestic demand, an action plan to boost consumption will also be rolled out soon, Zheng said.

On the investment front, this year, the private sector will be encouraged to participate in emerging sectors and future industries, and the government will roll out a series of key projects in sectors such as railways, nuclear power, water conservancy, and major scientific and technological infrastructure, he said.

China's emerging industries continued their rapid expansion in 2024. The so-called "three new" economy—a collection of economic activities with new industries, new business formats and new business models—accounted for over 18 percent of China's GDP last year, according to Zheng.