The fund to aid firms in overcoming short-term liquidity pressure was set up by Guosheng Group, an investment platform owned by the Shanghai government, in partnership with other state-owned enterprises, the State-owned Asset Supervision and Administration Commission (Sasac) said in a statement on its website.

It said the fund, to be run in a “market-based manner”, will mainly invest in private firms with good prospects and technological strength.

No concrete details were given about how the fund would work or how it would decide what firms to support.

Chinese President Xi Jinping has vowed to support the private sector, which is struggling amid a slowing economy and a broadening Sino-US trade war.

A growing number of local governments and asset managers have set up “relief” funds to help stem slides in share prices and ease margin call pressures on listed firms that have used their own slumping shares as collateral to raise money.