Supporting its growing cultural and creative industries is a key priority for Chengdu, and the city’s investment potential has been well-documented in recent years. However, small to medium sized creative enterprises in Chengdu often face barriers when raising funds, and are still seen as too great a risk by potential investors, inhibiting the growth of the sector. The Chengdu Municipal Party Committee and Government’s five year Action Plan to make Chengdu into Western China’s cultural and creative capital, identifies innovative cultural financing as one of its seven key actions.
Innovative cultural financing aims to make the financing of cultural and creative enterprises accessible, affordable and efficient. It makes use of partnerships between the government, public and private sector, and manages the perceived risks to investors. It hopes to achieve this by setting up investment banks to cater directly for cultural and creative enterprises, offering risk compensation to potential investors. The Chengdu ‘Culture and Creative Industries Government Guide Fund’, a 10 billion RMB fund, is being set up to incentivise more venture capital into the cultural and creative sector, including start-ups, listed cultural corporations and other mid to large sized projects. Proposals for financing innovative products making use of new technologies such as big data and cloud computing are being explored. Insurance companies are also being encouraged to offer new products and services tailored to the culture sector.
Under the initiative, Chengdu City Government sourced a 100 million RMB ‘Cultural and Creative Enterprise Financing Risk Capital Fund’, encouraging banks to set up cultural and creative investment branches, offering services around risk compensation. As well as the government and the bank taking the financial risks of investment, the model also shifts the nature of funding for creative enterprises from a direct government subsidy to an interest loan subsidy. Meanwhile, the first stage of the Chengdu ‘Culture and Creative Industries Investment Fund’ is being released, amounting to approximately 1.37 billion RMB of funding, and broadening financing options from debt financing to equity investments. It is a structured fund, made up of investments from various levels of government, stateowned cultural enterprises and funds.
It is hoped that developing a healthy investment environment for the creative industries will improve the financial sustainability and capability of Chengdu’s cultural enterprises, and develop new opportunities for Chengdu’s thriving financial sector.