Economy

Ministry sets up culture fund

By Chen Limin (China Daily)
Updated: 2011-07-07 14:08

Nation aims to raise 20 billion yuan to support sector on a State level

BEIJING - China has established the first State-level investment fund targeting the cultural industry as part of its effort to develop the sector.

The China Culture Industrial Investment Fund, launched by the Ministry of Finance and three companies, aims to raise 20 billion yuan ($3.09 billion) in the long term to invest in companies involved in news and publishing, radio and film, technology and the Internet.

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"The cultural industry still lacks vitality and companies find it hard to raise funding and invest in others; the fund is intended to ease these problems," Vice-minister of Finance Li Yong said on Wednesday. The fund has already raised 6 billion yuan.

BOC International Holdings Ltd, a unit of Bank of China Ltd, China International Television Corp and Shenzhen International Cultural Industry Fair Co Ltd joined the ministry in starting the fund.

The establishment of the fund came after the cultural industry was highlighted in the Central Economic Working Conference last year as a key sector for development in the 12th Five-Year Plan (2011-2015).

The government is seeking to promote development of the sector as one way to transform its economic growth mode.

The China Culture Industrial Investment Fund is one of an increasing number of investment funds in the sector. Many venture capital and private equity firms are also interested in the cultural sector.

"The market is full of potential but many cultural companies are not competitive enough to thrive. That's why culture has to marry industry to make itself big," Yu Feng, president of the Yunfeng Fund, a private equity fund, said in an earlier interview with China Daily.

The Yunfeng Fund is also backed by Jack Ma, chairman of Chinese e-commerce giant Alibaba Group.

There were 150 investments in the media and entertainment industries in China between 2004 and the first half of 2010, according to the Zero2IPO Group, a Chinese research company. Among these investments, disclosed funding hit $1.68 billion.

The government encourages mergers, acquisitions and public listings in the cultural industry to help such companies expand.

Chen Shaofeng, vice-dean of the Institute for Cultural Industries at Peking University, said that some 120 to 150 companies in the sector might go public over the 12th Five-Year Plan period.