BEIJING, Aug. 18 (Xinhua) -- China launched a 200 billion-yuan (30 billion-U.S. dollar) state-controlled venture capital fund on Thursday to support innovation and upgrading in centrally-administered state firms.

The fund, approved by the State Council, is financed by China Construction Bank Corporation, China Reform Holdings Corporation Ltd. (CRHC), the Postal Savings Bank of China and Shenzhen Investment Holding Co., Ltd., according to a statement of the State-owned Assets Supervision and Administration Commission (SASAC).

The fund has an initial capital of 100 billion yuan, 34 billion of which came from the wholly state-owned CRHC, the fund's main sponsor and controlling shareholder.

The CRHC was chosen by the government as a pilot state capital operating firm in February amid China's reforms to improve the efficiency of state firms and move them up the value chain.

The fund will serve the development of centrally-administered state companies by investing in technology and upgrades, said Meng Jianmin, vice chairman of the SASAC.

Investment will focus on forward-looking, strategic and fundamental industries, he said.

China has more than 150,000 state-owned firms, with over 100 under central government control. They play a significant role in the economy but have seen their profits decline as the economy slows.

Combined profits of non-financial state firms in China dropped 8.5 percent year on year to 1.13 trillion yuan in the first six months of 2016. Those under central government control saw profits fall 9 percent.

Policy makers are promoting an overhaul on state firms, piloting mixed ownership programs, encouraging mergers and acquisitions, and downsizing overstaffed companies.