Shanghai launches $7.9-bn yuan fund to aid overseas acquisitions

The provincial government of Shanghai, the commercial and financial centre of China, has launched a 50-billion yuan ($7.9 billion) fund to aid Chinese companies to make overseas acquisitions as part of Beijing's plan to internationalise the yuan.

The fund, managed by Sailing Capital International, has been set up by Shanghai International Group, the investment affiliate of the Shanghai government, and state-owned enterprises and private companies. It is China's biggest yuan-denominated international fund.

Sailing Capital has a fundraising target of 50 billion yuan and has already raised 12 billion yuan, the Shanghai government said on its website.

''The yuan-backed fund will help domestic companies go abroad in seeking more investment opportunities,'' said Liu Shiyu, deputy mayor of the People's Bank of China.

''The rapid development of cross-border yuan business in recent years has laid the backbone for capital like Sailing's to sail along.''

Shanghai vice mayor, Tu Guangshao said that the fund will "meet Chinese companies' strategic needs to venture out, and would also play an important role in building Shanghai into a centre for asset management and cross-border investment denominated in yuan."