Government investment funds are the result of the integrated innovations across industrial

fiscal

and financial policies

and in recent years have become a vital force in strengthening China's financial system

promoting regional economic development

and facilitating industrial transformation. As a critical infrastructure sector underpinning China's high-quality socio-economic development

the water sector plays an important role in maximizing the leverage effect of government investment

attracting additional private capital

and advancing sectoral progress through coordinated public-private efforts. This paper first introduces the concept and core mechanisms of government investment funds and summarizes key considerations in their establishment and operation

It then analyzes the strategic value of applying such funds in the water sector from the perspectives of national policy alignment

financing challenges

and the promotion of market-oriented reform. Drawing on two types of case studies

leveraging existing comprehensive funds and independently initiating sector-specific funds

the paper presents policy recommendations tailored to the water sector's development needs. These include selecting application fund application models

clarifying investment priorities

optimizing fund design schemes

deepening market-based reforms in water conservancy

and enhancing training and public awareness related to fund implementation.