- Province establishes fund with Great Wall Asset Management to recycle dormant state-owned capital
- Vehicle is expected to start at about 6 billion yuan and could expand beyond 20 billion yuan through parallel funds
Zhejiang has launched its first fund dedicated to revitalizing state-owned assets, as the province seeks to free up locked capital and redirect it toward strategic emerging industries and future technologies.
The fund, established on June 12 by Zhejiang State-owned Capital Operation Co., Ltd. (浙江省国有资本运营有限公司) and China Great Wall Asset Management Co., Ltd. (中国长城资产管理股份有限公司), is designed to create a market-based mechanism for converting existing state-owned assets into fresh investment capital.
Officials described the initiative as a closed-loop model linking dormant assets, recovered funds and new productive investment.
Full investment cycle
The vehicle will operate across the full investment cycle, including acquisition, financing, management and exit.
Its mandate includes purchasing fund interests, acquiring equity stakes in underlying projects and restructuring underutilized assets, providing liquidity and exit solutions for long-term state-owned investments.
The challenge it seeks to address is common among local governments and state investors.
Capital is often tied up in older investment funds whose underlying projects have yet to exit, limiting the ability to support newer strategic priorities.
By purchasing those fund stakes, the new vehicle can release trapped capital and channel recovered proceeds into sectors such as advanced manufacturing, technology and other areas aligned with China’s “new productive forces” agenda.
While the fund’s official size has not been disclosed, local media reports earlier this year indicated that one of its sponsors was working with a central financial asset management company to establish a 6 billion yuan ($887 million) asset revitalization fund.
The same report said discussions on parallel funds were underway and that the overall platform could eventually exceed 20 billion yuan.
Multiple exit channels
The fund will introduce a batch-management approach for different asset classes, tailoring restructuring strategies according to asset type. Exit channels will include REIT issuances, property transfers and equity sales.
Managers will also operate under a negative-list framework that explicitly defines prohibited asset categories and investment activities.
Transactions not included on the list may be explored, providing operational flexibility while helping safeguard state-owned assets.
China Great Wall Asset Management, a nationwide asset manager controlled by state-backed Central Huijin Investment Ltd., brings experience in distressed-asset disposal, restructuring and recovery.
Zhejiang State-owned Capital Operation serves as a key provincial platform for industrial upgrading and implementation of strategic initiatives.
Template for other regions
The two parties have signed a strategic cooperation agreement and said they will work together to support the development of new growth industries in Zhejiang.
Industry observers said the partnership offers a potential blueprint for addressing capital circulation bottlenecks within China’s state-owned investment system.
If successful, the Zhejiang model could provide a template for other regions seeking to recycle existing assets while financing new rounds of industrial development.
The initiative follows Zhejiang’s launch in July 2025 of a 500 million yuan secondary fund, with a long-term target of 5 billion yuan, to acquire fund interests and provide liquidity for existing investors.
The province is also exploring the development of buyout funds and secondary funds as part of efforts to build a “patient capital” ecosystem supporting technology innovation,
Officials expect the two funds to work in tandem to strengthen the province’s capital recycling and reinvestment ecosystem.
