A man looks at Aliyun cyber security services, platform provided by Alibaba, which is shown at a cyber security exhibition on Nov 24, 2014. [Photo/Asianewsphoto]

The newly established China Internet Investment Fund is expected to foster innovation and entrepreneurship within the internet sector via a market approach, analysts said on Monday.

The 100-billion-yuan ($14.6 billion) internet investment fund, co-sponsored by Cyberspace Administration of China and Ministry of Finance, was launched at the weekend.

Six strategic partners－including Industrial and Commercial Bank of China Co Ltd, CITIC Guoan Group Co Ltd, China Post Life Insurance Corp Ltd and China's three major telecoms carriers－h(huán)ave funded the first 30 billion yuan.

Three State-owned banks－ICBC, China Development Bank and Agricultural Bank of China Co Ltd－will provide financial services and 150 billion yuan of credit for enterprises which have raised money from the internet investment fund.

"Based on market operations, the fund aims to cultivate and promote a new driving force in the internet sector," said Deputy Finance Minister Yu Weiping.

Shen Meng, director of Chanson & Co, a boutique investment bank in China, said the establishment of the State-backed fund was of great significance for the development of the internet sector and the Internet Plus industry.

"It will bring new opportunities for all parts of the internet sector. However, it is difficult to make profits for enterprises without their own core technologies and those unable to cater to consumers' new needs."

A report published by the China Internet Network Information Center during the World Internet Conference in Wuzhen last year showed that China's global ranking among countries with a strong internet-based industry had moved up to 25 in 2016 from 36 in 2012, with a score of 72.8 out of 100, surpassing the average of G20 economies for the first time.

Shen added that as China stepped up efforts on economic restructuring and upgrading, the government aimed to boost the development of Internet Plus by bankrolling innovation companies.

"The fund has several advantages, such as abundant money and supportive policies. However, it will take on risks for higher yields," he added.

One analyst urged caution.

"They should invest in firms and projects of real value to avoid bubbles in the innovation field," said Li Zichuan, an analyst at Beijing-based internet consultancy Analysys.

Xiang Ligang, CEO of telecoms industry website cctime.com, said the fund also aimed to better manage cyberspace.