State-backed fusion energy firm debuts in Shanghai with 15b yuan investment

by TIAN Heqi

China has launched its most ambitious commercial fusion energy initiative to date, with the establishment of China Fusion Energy in Shanghai. The company, backed by central and local state-owned investors, has secured a 15 billion yuan (US$2.1 billion) capital injection, making it the most well-funded player in the country's nascent fusion sector.

The new firm is led by China National Nuclear Corporation (CNNC), which holds a 50.35 percent stake and contributed both capital and intellectual property via its Southwestern Institute of Physics. Other investors include PetroChina Kunlun Capital (20 percent), Shanghai Fusion Energy (11.81 percent), China National Nuclear Power (6.65 percent), Zhejiang Zheneng Electric Power, Sichuan Fusion, and National Green Development Fund.

China Fusion Energy will focus on magnetic-confinement fusion, using the tokamak approach. The company aims to build a full pipeline from pilot and demonstration reactors to commercial power plants. It also plans to develop digital R&D platforms and coordinate capital operations.

Fusion energy—long viewed as a clean, abundant, and safe alternative to fossil fuels—remains technically challenging and commercially distant. China's push reflects growing urgency to stay competitive in a field also pursued by the U.S., Japan and the EU.

Unlike most Chinese fusion startups spun out of labs or universities, China Fusion Energy has the backing of heavyweights across government, energy and finance. The company's creation marks the first direct investment by the 100-billion-yuan Shanghai Future Industry Fund, which has prioritized fusion as one of five key "future industries."

Fusion efforts are part of a broader national nuclear strategy first outlined in 1983. Shanghai has rolled out its own roadmap to become a world-class nuclear hub by 2027, targeting breakthroughs in hybrid confinement systems and high-temperature superconducting technologies.

Despite the long horizon, investor enthusiasm is growing. Fusion-linked stocks such as JISCO Hongye Steel, Zhefu Holding, Sobute New Materials, Dongfang Electric, Eurocrane surged more than 10 percent following the announcement. China National Nuclear Power rose 0.86 percent on Wednsday, while Zhejiang Zheneng Electric Power gained 3.06 percent.