China issues new regulation to guide development of gov't investment funds

China issued a regulation on Monday to spell out clear requirements for the functional positioning and investment priorities of government investment funds of national and local levels.

The document was jointly issued by the National Development and Reform Commission (NDRC), the Ministry of Finance, the Ministry of Science and Technology, and the Ministry of Industry and Information Technology.

It aims to address funding problems such as mismatch between local resource endowments and industrial foundations, unclear fund positioning, and homogenized investment directions that have occurred in the establishment and operation of government funds in recent years.

The document clarifies that national-level funds should focus on the overall picture and prioritize support for the construction of the modern industrial system and making breakthroughs in key and core technologies, so as to address industrial shortcomings and solve development bottlenecks.

At the same time, local funds are required to choose investment directions based on the local industrial foundation and actual development, implement the requirements for a unified national market in project investments, providing support for industrial upgrades, enhancement of innovative capabilities, and incubation of micro and small private enterprises and sci-tech companies, while guiding effective participation by private capital, according to the document.

"National-level funds should take a holistic approach, address major issues while relaxing control over minor ones, and make demonstration and guidance across regions and in key fields. Local funds need to accurately position themselves and adapt measures compatible with local conditions, extending support to competitive industries and small and medium-sized enterprises with local characteristics," said Zhao Huaiyong, director of the Department of Finance, Banking and Credit Construction at the NDRC -- China's top economic planner.

In addition, on the same day, the NDRC also released a trial regulation aimed at improving the evaluation and management of government investment fund allocations. The move aims to better leverage these funds to serve national strategies, promote industrial upgrading, and foster innovation and entrepreneurship.

China issues new regulation to guide development of gov't investment funds

U.S. stocks finished slightly higher on Monday, staging a late-session recovery as investors navigated a volatile landscape marked by a criminal probe into the Federal Reserve leadership.

The Dow Jones Industrial Average rose 86.13 points, or 0.17 percent, to 49,590.2. The S&P 500 added 10.99 points, or 0.16 percent, to 6,977.27. The Nasdaq Composite Index increased by 62.56 points, or 0.26 percent, to 23,733.9. Despite the positive close, the market experienced significant intraday turbulence, with the Dow dropping nearly 500 points at its session lows.

Nine of the 11 primary S&P 500 sectors ended in positive territory. Consumer staples and industrials led the gainers, rising 1.42 percent and 0.75 percent, respectively. Financials and energy were the primary laggards, declining 0.8 percent and 0.66 percent.

Market sentiment was initially shaken by an announcement on Sunday from Fed Chair Jerome Powell, who confirmed that federal prosecutors are investigating him over the Fed's multi-billion-dollar project to renovate its headquarters. Powell characterized the probe as an attempt by the Trump administration to compromise the Fed's independence.

Further weighing on the financial sector was a proposal by U.S. President Donald Trump to cap credit card interest rates at 10 percent for one year, which triggered a sell-off in banking stocks amid concerns over restricted lending and reduced profitability. Capital One shares plummeted 6.42 percent, while Citigroup, JPMorgan and Bank of America also recorded losses.

In contrast, retail giant Walmart led the Dow's advance, climbing 3 percent following news of its upcoming inclusion in the Nasdaq 100 index. The company also announced a strategic partnership with Google's Gemini AI to enhance the digital shopping experience.

Investors are awaiting Tuesday's release of the U.S. consumer price index for December 2025. Following last week's cooling labor market data, market participants increasingly expect the Fed to maintain interest rates at their current levels during the upcoming January meeting.

U.S. stocks close higher amid criminal probe into Fed chair Powell