China moves to innovate rural financing

China is targeting venture capital (VC) and private equity (PE) funds to boost financial support for rural areas as part of its efforts to shore up the rural economy, according to a government document published on Tuesday.

China will encourage establishment of rural-focused VC and PE firms to provide more capital to rural projects in an effort to nurture expansion and new product innovation, according to the statement on the government website at www.gov.cn.

The move is part of a package approved by China's State Council, the country's cabinet, to increase support for the agriculture sector, the rural areas and farmers.

Rural finance remains the weakest link in China's financial system, according to the document.