510 Billion "Patient Capital" Ready: Central SOEs Launch Long-Term Strategic Emerging Industries Fund

A 510 billion yuan "capital giant"—the Central Enterprises Strategic Emerging Industries Development Fund (referred to as the SOE Strategic Emerging Fund)—has officially set sail in Beijing. Initiated by the State-owned Assets Supervision and Administration Commission (SASAC) and managed by China Reform Holdings Corporation (China Reform), the fund marks a pivotal move by state-owned enterprises (SOEs) to strategically invest in emerging industries. China Reform, as the cornerstone investor, has committed an initial 150 billion yuan.

Experts highlight that this initiative is not merely a fund launch but a systemic, large-scale strategic deployment by state-owned capital to cultivate new quality productive forces and open a "second growth curve." The fund aims to address three critical bottlenecks in SOEs' development of strategic emerging industries: long-term investment pressure, fragmented innovation resources, and gaps in technology commercialization.

**Patient Capital: A 15-Year Commitment to Hard Tech** Launched on October 29, the SOE Strategic Emerging Fund has a first-phase size of 510 billion yuan and a total lifespan of 15 years (5-year investment period, extendable by 2 years, and 8-year management and exit period). This long-term horizon reflects the national strategy to nurture hard-tech industries, focusing on strengthening supply chains and achieving self-reliance in critical sectors like integrated circuits, advanced manufacturing equipment, and core software.

SASAC officials emphasized that the fund will adopt innovative mechanisms to serve as "patient capital, long-term capital, and strategic capital," aligning with the "New Quality Productive Forces Enterprise Initiative" launched last year. This approach aims to build a comprehensive ecosystem for cultivating unicorn enterprises led by state-owned capital.

**Breaking Barriers: A Collaborative "Aircraft Carrier" Investment Ecosystem** China Reform, as the lead investor, has rallied 14 central SOEs, including China Mobile, Sinopec, and CNOOC, alongside the Beijing Xicheng District government, to form a synergistic investment platform. This model transcends traditional silos, enabling cross-industry collaboration and resource integration to tackle "chokepoint" technologies and future industries like AI, quantum tech, and biopharma.

China Reform's role as a state capital operating company—focusing on capital allocation rather than direct industry operations—provides unparalleled flexibility. By 2024, it had invested over 330 billion yuan in 360+ strategic emerging projects, with 380 billion yuan deployed in 2024 alone.

**Reshaping Growth: Capital and Industry Dance to a "Second Curve"** SASAC Chairman Zhang Yuzhuo recently underscored the need for SOEs to pivot toward emerging industries to build a modern industrial system. The fund is central to this transition, targeting nine strategic emerging industries and six future industries. Since the 14th Five-Year Plan, central SOEs have invested 8.6 trillion yuan in these sectors, with nearly 100 billion yuan in venture funds dedicated to early-stage, hard-tech bets.

Analysts argue that the fund’s success should be measured beyond financial returns—by its ability to foster innovation cultures, bridge technology gaps, and create industrial ecosystems. By pairing patient capital with SOEs' robust infrastructure, the initiative aims to de-risk long-term bets while securing national strategic objectives.

This landmark fund signals a new era of state-led, patient capital driving China’s industrial upgrade—a blend of national strategy, collaborative scale, and long-term vision poised to redefine global competitiveness in critical technologies.