The Chinese government is pouring money into public-private investment funds, known as guidance funds, to advance China’s strategic and emerging technologies, including artificial intelligence. These funds are mobilizing massive amounts of capital from public and private sources—prompting both concern and skepticism among outside observers. This overview presents essential findings from our full-length report on these funds, analyzing the guidance fund model, its intended benefits and weaknesses, and its long-term prospects for success.

China’s government is using public-private investment funds, known as guidance funds, to deploy massive amounts of capital in support of strategic and emerging technologies, including artificial intelligence. Drawing exclusively on Chinese-language sources, this report explores how guidance funds raise and deploy capital, manage their investment, and interact with public and private actors. The guidance fund model is no silver bullet, but it has many advantages over traditional industrial policy mechanisms.

CSET's Jason Matheny hosted Under Secretary of Defense for Research and Engineering Michael Kratsios for his first public event in his new role. Inside Defense highlighted this event, noting Under Secretary Kratsios' plans to prioritize technologies such as artificial intelligence and 5G.

New Acting Under Secretary of Defense for Research and Engineering Michael Kratsios spoke with CSET Founding Director Jason Matheny and delivered formal remarks in his first public appearance in the role. The pre-recorded discussion and remarks addressed the challenges and opportunities inherent in defense innovation.