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Industrial Bank Contributed to the Establishment of CRDF to Support China’s Railway Construction

Recently, China Railway Development Fund Co., Ltd. (hereinafter referred to as “CRDF”) held the initiator meeting in Beijing. Industrial Bank (IB), through China Industrial Wealth Management Limited which is a solely-owned subsidiary under Industrial Fund Management Co., Ltd., a subsidiary controlled by the bank, signed the “Contributor Agreement” and “Articles of Incorporation” with China Railway Corporation, with an initial contribution of RMB 2 billion.

According to the agreement, IB, as the only joint-stock bank, contributed to the founding of CRDF together with the three state-owned banks including ICBC, ABC and CCB. The investment platforms of the four banks become shareholders of preferred shares of CRDF while China Railway Corporation serves as the representative of governmental contribution authorized by the State Council, main initiator and shareholder of ordinary shares. 

IB indicated that it would take this as an opportunity to reinforce innovation linkage and develop stock and debt simultaneously so as to fully deepen the business cooperation with China Railway Corporation. “This time, IB's contribution to the establishment of CRDF as a social investor and shareholder of preferred shares via the investment platform is an active trial that the bank made to explore ways to get involved in the mixed ownership reform of state-owned enterprises and support the construction of national strategic infrastructure”, said a relevant person-in-charge.

It is said that CRDF is a main player in the diversified railway investment and financing markets supported by the central government and guided with fiscal funds. Adopting the corporate-based fund form, it is the fund in the infrastructure industry with the largest scale up to now. As a main market-oriented investment and financing player in railway, the fund will further attract the investment of social capital, raise funds for railway construction and development constantly, and give priority to the protection of capital source for the construction of railway in Central and Middle China.

As indicated by relevant officer of China Railway Corporation, the establishment of CRDF is an important measure to implement the intentions specified in the Opinions of the State Council on Reforming the Railway Investment and Financing System and Accelerating the Railway Construction. It is of great significance to make innovation in the railway investment and financing systems, attract social capital to make investment in railway, accelerate railway construction, and in particular speed up the railway construction in Central and Middle China and promote the social and economic development in a sustainable, sound and harmonious manner.

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