China eyes capital market to facilitate S&T self-reliance

China has initially established a multi-level capital market matrix including STAR Market, ChiNext and Beijing Stock Exchange, facilitating the self-reliance development of science and technology, Economic Daily reported on Tuesday.

As the "experimental field" of China's stock issuance registration scheme reform, STAR Market, the Nasdaq-style sci-tech innovation board, has opened up the listing channels for not-yet profitable enterprises, special voting enterprises and red chip enterprises through a series of institutional innovations, and strengthened the capital market's support for core technology.

At present, among the listed companies on the STAR Market, the number of companies in advanced and sophisticated industries such as electronics, pharmaceutical biology, mechanical equipment and national defense military industry rank top.

"The STAR Market provides more flexible and convenient financing channels for science and technology innovation enterprises and promotes the collaborative innovation and development of the middle and downstream of the industry chain of science and technology enterprises." Zhao Xijun, a finance professor at the Renmin University of China, believes that the five sets of listing standards for the STAR Market correspond to the requirements of enterprises with different development states and different equity structures and are highly targeted, enabling more and more science and technology innovation enterprises to enter the listing channel through different standards, and also providing more investment targets for investors.

Up to now, 11 STAR Market indexes have been released and a STAR Market index system covering different types of scale, theme and strategy has been initially established, with the tracking scale of related products at home and abroad exceeding 120 billion yuan ($16.52 billion).

Over the past three years since the trial of the registration system, ChiNext has also become more diversified and inclusive, attracting a large number of innovative and entrepreneurial enterprises and gradually becoming a new highland for innovative growth.

Chen Huaping, chairman of the Shenzhen Stock Exchange, said that, in recent years, the Shenzhen Stock Exchange has accelerated the gathering of factor resources to scientific and technological innovation. In the next step, they will strive to build a world-class exchange and create a good environment for global investors to participate in China's capital market.

So far, multiple Chinese governmental departments have released positive signals to increase financial support for scientific and technological innovation, and the function of the capital market to serve scientific and technological enterprises will be further enhanced.

An executive meeting of the State Council recently has deliberated and approved the action plan to intensify efforts to support the financing of science and technology enterprises, proposing to guide financial institutions to further optimize their products, markets and service systems according to the different needs of science and technology enterprises at different stages of development and provide diversified financial services for science and technology enterprises throughout their life cycle.