The city of Xi'an – capital of Northwest China's Shaanxi province – recently established an innovation investment fund, which is reportedly expected to make a real difference in helping to boost the local economy.

It is reportedly designed to promote the close integration of science and technology and the economy – as well as create a close connection between tech innovation achievements and industrial development.

The first phase of the fund will have financial resources of 10 billion yuan ($1.58 billion), with Xi'an making arrangements for providing 8 billion yuan of the total and striving to secure another 2 billion yuan from the provincial government's investment guidance fund.

The capital contributions of the parties will be paid in three phases according to a ratio of 4:3:3, with all of them set to be in place by the end of 2023.

The fund is expected to mainly invest in industries such as electronics information, artificial intelligence, optoelectronic chips, aerospace, new materials, new energy and biomedicines.

It is understood that it will focus on the cultivation of independent intellectual property rights, the transformation of sci-tech discoveries and achievements, plus the localization of core technologies and other fields – as well as cooperate with leading fund management institutions to set up market-oriented sub-funds.

The duration of venture capital funding is expected to be long-term, while the duration of sub-funds will reportedly be determined in accordance with industry practice.