BEIJING -- China on Tuesday established its first state-level yuan-based fund of funds (FOF) with its total value to reach 60 billion yuan (about $9 billion).

The yuan FOF was jointly initiated and established by the Suzhou Ventures Group (SVC) and China Development Bank Capital Co., Ltd., a wholly-owned subsidiary of the China Development Bank (CDB).

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FOFs invest in funds such as venture capital or private equity funds and have become a main pillar of the finance industry, along with banking and insurance.

The fund would be worth 15 billion yuan during its first phase of operation, with 10 billion yuan to be used as Private Equity (PE) FOF and managed by the CDB Capital Co., Ltd, and the remaining 5 billion yuan to be used as Venture Capital (VC) FOF and managed by the SVC, a statement on the CDB's website Tuesday said.

The PE FOF will mainly invest in funds focused on industrial mergers and acquisitions, while the VC FOF will predominately invest in venture capital, the statement said.

The FOF has been approved by the State Council, the cabinet, said the statement.

CDB is one of China's major policy banks with total assets exceeding 4.5 trillion yuan by the end of last year. The SVC is a large investment group of the Suzhou Industrial Park with 3 billion yuan in registered capital.