In the first such venture between an international buyout firm and the Chinese government, Blackstone Group has agreed to set up a US$731 million investment fund with the newly formed government of the Pudong New Area in Shanghai, Bloomberg reported. The structure of the Blackstone Zhonghua Development Investment Fund was not disclosed, but the fund will target investments in Shanghai and neighboring areas, Blackstone said in a statement. Vincent Chan, co-founder of China-focused fund Spring Capital Asia said, "The Blackstone deal represents China’s willingness to use private equity to shake up the economy. China’s future economy will be driven by its private enterprises." While China’s largest stock exchange is located in Shanghai, the city lags behind Beijing, Tianjin, and Hong Kong as a private-equity hub.