A Study On Mode Of Operation And Supporting Environment Of Infrastructure Industrial Investment Fund In China

For a long period of time, sources of funding for infrastructure construction in China are very limited. Infrastructure construction has been facing the problem of lacking in fund for investing demand. As a new investing system, Infrastructure Industrial Investment Fund is beneficial for narrowing the funding gap of infrastructure while stimulating private capital to flow into infrastructure industry.Although many scholars have proposed industrial investment fund as a new fund-raising channel for infrastructure, they remained making descriptive analysis and suggestions .They have not mentioned its specific mode of operation. This paper demonstrates in details the mode of operation of Infrastructure Industrial Investment Fund and I hope that this study will stimulate more ideas from others in the future.Based on theory of industrial economics and finance and banking as well as characteristics of infrastructure, firstly this paper analyzes background and practical experience for developing Infrastructure Industrial Investment Fund. We then focuses on the mode of operation of the fund, including the establishment of the fund, sources of funding, project evaluation, Principal-Agent relationship after investment, the exit of fund, etc. Besides, we proposes some countermeasures and suggestions on building the supporting environment of the Infrastructure Industrial Investment Fund, including market environment, policy environment, legal environment, personnel environment and social environment.