electra-supply.comOn October 8, Hangzhou hosted an event kickstarting the pilot program for financial asset investment company (AIC) equity investments. During the event, the AICs from five major banks—Industrial, Agricultural, China, Construction, and Communications—signed cooperation agreements with local state-owned enterprises, indicating an intention to establish a fund scale of 90 billion yuan. This notable collaboration makes Hangzhou the first city in the nation to achieve comprehensive cooperation with all five major AICs.
The National Financial Regulatory Administration announced on September 24 that the scope of the AIC equity investment pilot program has expanded from Shanghai to include 18 cities, with Hangzhou being one of the newest pilot cities. The city wasted no time in advancing the initiative and solidifying partnerships, marking an important milestone in emphasizing technological finance as a core focus of its financial development.
The expansion of the AIC equity investment pilot program is a significant move to bolster patient capital and represents a promising exploration of new financial tools to support the growth of innovative productivity.
As a pioneer in the digital economy, Hangzhou is committed to making technological innovation the driving force behind economic growth and is working to create a robust innovation ecosystem. The five bank AICs plan to leverage the pilot’s strategic agreements to enhance collaborative financing—connecting loans, equity, and guarantees—across key industrial sectors, providing full lifecycle support for technology enterprises, and fostering technological innovations and industrial upgrades.
Yao Gaoyuan, Deputy Secretary of the Hangzhou Municipal Committee and Mayor, stated that the AICs, often referred to as the “national team” for patient capital, will not only boost the city’s financial sector development but also create diverse direct financing options for local tech companies. This, in turn, is expected to accelerate the formation of innovative capital in Hangzhou and promote the transfer and transformation of technological achievements, ultimately optimizing and upgrading the city’s industrial structure.
Wei Zheng, Vice President of the Industrial and Commercial Bank of China Zhejiang Branch and President of the Hangzhou Branch, remarked that previously, AICs could only conduct equity investments through debt-to-equity swaps with limited investment purposes. However, the expansion of the pilot program allows AICs to fully leverage their expertise in venture capital and equity investment, thereby increasing support for technological innovation and broadening the sources of equity funding for enterprises. He emphasized that this initiative creates a win-win situation for all parties involved.
The pilot program features a broader investment scope and more flexible mechanisms compared to earlier trials. The new policy has not only relaxed limits on equity investment amounts and ratios but also raised the proportion of on-balance-sheet investments from 4% to 10% and the allowable share of a single private equity fund investment from 20% to 30%. These policy benefits provide ample opportunities for the bank AICs to expand their equity investment activities.
Industry insiders believe that the gradual implementation of the AIC equity investment pilot policy will expedite the entry of bank capital into the equity investment market. This is expected to encourage and motivate more long-term funding for technological innovation while helping banks diversify their investment channels and cultivate the growth of the patient capital “national team” in the tech investment sector.
Currently, Hangzhou stands at a pivotal juncture in elevating its urban capabilities, striving to establish itself as a comprehensive national science center and a premier location for technological achievement transfer and transformation. The city is keen to enhance five major industrial ecosystems—smart IoT, biomedicine, high-end equipment, new materials, and green energy—through more robust, wider-ranging, and diverse financial support.
In recent years, Hangzhou has deepened its path toward financial development with Chinese characteristics, aiming to create a “financial stronghold with international influence” by balancing financial regulation, risk prevention, service optimization, and reform. As of the end of August this year, Hangzhou’s deposits and loans reached 77,402 billion yuan and 71,612 billion yuan, respectively, with 307 companies nurtured to go public.
