China’s banks become major investors in Big Fund III

China has launched a 344 billion-yuan ($47.5 billion) semiconductor investment fund known as Big Fund III, involving six major financial institutions for the first time, Reuters reported on Tuesday.

The fund reflects President Xi Jinping’s push for China to reduce reliance on western technology amid escalating tensions with the US and Europe. Big Fund III, backed by major Chinese lenders, aims to boost the country’s chip industry.

Big Fund III, like its predecessors, has China’s Ministry of Finance as its largest shareholder with a 17 per cent stake.

However, this time, the fund has attracted new investors such as the Industrial and Commercial Bank of China, China Construction Bank, Bank of China, Agricultural Bank of China, Postal Savings Bank of China, and Bank of Communications.

In total, the six Chinese lenders have invested 114 billion yuan for a one-third stake in the fund.