A new round of capital market reform seeks "quality" in the "new"

Economic Reference News Agency Reporters Wu Lihua, Wu Wei, Xiang Jiaying

“Deepen the comprehensive reform of capital market investment and financing,” “Accelerate the development of a functionally improved capital market,” “Enhance the coordinated functions of investment and financing in the capital market”… From this year’s government work report and plan reports to the draft outline of the 14th Five-Year Plan, a series of important deployments clearly outline the strategic position of the capital market in China’s high-quality economic development.

Empowering innovation through capital, stimulating vitality through reform, the reform of the capital market is progressing steadily. During the two sessions, many interviewed delegates, committee members, experts, and scholars believe that at the new starting point of the 14th Five-Year Plan, we should take comprehensive investment and financing reform as the guiding force, continuously improve institutional inclusiveness and adaptability, and enable the capital market to better serve the real economy and cultivate new productive forces.

Capital Market Safeguards: Tech Companies Grow Rapidly

“Eight measures for the STAR Market,” the “1+6” reform plan for the STAR Market, the “Six M&A Measures”… In recent years, the comprehensive reform of investment and financing in the capital market has been steady and effective, with a qualitative leap in supporting technological innovation, paving the way for the growth of tech startups, allowing more innovative seeds to take root, sprout, and bear fruit in the fertile soil of capital.

The most direct beneficiaries of this transformative power are listed companies that leverage the capital market to achieve leapfrog development.

“Research and development of innovative drugs is a typical high-investment, long-cycle, high-risk industry. Continuous capital support and systematic policy coordination are key for companies to break through technical barriers and achieve commercialization,” said Lu Chunhua, Executive Director of Corporate Communications at Nuocheng Jianhua Pharmaceutical Co., Ltd. (referred to as “Nuocheng Jianhua”).

This biopharmaceutical company, focused on new drugs for malignant tumors and autoimmune diseases, was still unprofitable when it listed on the STAR Market in 2022. The funds raised through the listing have become vital for its ongoing R&D investments. Latest data shows that Nuocheng Jianhua expects to achieve operating revenue of 2.365 billion yuan and net profit attributable to the parent of 633 million yuan by 2025, turning losses into profits for the first time, and steadily entering a new stage of commercialization and sustainable growth.

“The STAR Market not only provided us with funding support but also witnessed our entire process from R&D breakthroughs to value realization,” Lu Chunhua said.

Similarly, Ninebot has also grown rapidly under the protection of the capital market. After listing on the STAR Market in 2020, leveraging the momentum of the capital market, Ninebot achieved leapfrog development, with revenue growing from 6 billion yuan in 2020 to 21.3 billion yuan in 2025, becoming an innovative force in the global short-distance transportation and service robot fields.

“Since listing on the STAR Market, we have deeply felt the comprehensive empowerment of the capital market for technological innovation,” said Xu Peng, Vice President and Secretary of the Board of Ninebot. From R&D investment to market expansion, from technological iteration to brand upgrading, support from the capital runs through the entire growth process of the enterprise.

Jin Li, member of the National Committee of the Chinese People’s Political Consultative Conference and Vice President of Southern University of Science and Technology, believes that through valuation and pricing mechanisms, the capital market can break traditional path dependence, guide social funds to strategic emerging industries and advanced manufacturing, and accelerate the formation of new productive forces. This market-oriented selection mechanism can effectively identify and support industries with technological barriers and growth potential, achieving deep integration of industry chains and capital chains.

Focusing on Cutting-Edge Technology, Increasing Capital Supply

“From China’s actual situation, whether cultivating and expanding emerging industries, proactively planning future industries, or innovating and greening traditional industries, accelerating the integration of technological and industrial innovation requires further发挥 the functions of the capital market,” said Wu Qing, Chairperson of the China Securities Regulatory Commission, at the Fourth Session of the 14th National People’s Congress during a press conference on the economy.

The government work report explicitly proposes strengthening financial services across the entire chain and lifecycle of technological innovation, implementing “green channels” for listing financing and mergers and acquisitions for key core technology enterprises, supporting innovation through financial technology.

Tan Xuan, a deputy to the National People’s Congress and Distinguished Professor at Peking University, stated that the capital market precisely targets technological frontiers and industrial upgrading needs, optimizing制度 arrangements for IPOs, refinancing, and mergers and acquisitions, strengthening capital supply in key areas such as hard technology, green low-carbon, and digital economy.

Meanwhile, the unique advantages of the capital market in sharing innovation risks and promoting the formation of innovative capital are increasingly evident. “Looking back on our company’s development, the capital market has provided us with full-chain services from venture capital to IPO financing, allowing us to focus on R&D,” said Shi Jianwei, Secretary of the Board of Beijing Parallel Technology Co., Ltd. The risk-sharing mechanism of the capital market effectively guides social capital to “invest early, small, long-term, and in hard technology,” fully stimulating entrepreneurial spirit and talent-driven innovation.

Shaozong You, Party Secretary and President of Zhongke Xingtu Co., Ltd., said that the STAR Market, through market-oriented and institutionalized methods, fundamentally solves the core issues faced by tech startups in early development, such as “where does the money come from,” “how to motivate,” and “who bears the risk,” enabling the “spark” of technological innovation to “spread wildfire.”

Inclusive, Precise, and Diverse: Improving Service Quality

The draft outline of the 14th Five-Year Plan proposes to deepen the comprehensive reform of investment and financing in the capital market, enhance institutional inclusiveness and adaptability, and increase the proportion of direct financing.

At this new starting point for reform, how can the capital market further improve the quality and efficiency of services for technological innovation and promote the gathering of factor resources into new productive forces? Many delegates and committee members offered suggestions:

— Make listing standards more inclusive. Jin Haoran, member of the Chinese People’s Political Consultative Conference and Chairman of Hengyin Financial Technology Co., Ltd., suggested further完善多元化的上市标准，以市值、研发投入、核心技术、市场占有率等为核心，更贴合企业发展规律和产业特点，让更多处于成长期、研发期的创新型企业能够登陆资本市场。

— Make sector positioning more precise. Tan Xuan said that focusing on制度供给的精准性，加快构建覆盖企业全生命周期的差异化支持体系，北交所强化专精特新“小巨人”培育功能；科创板坚守“硬科技”定位并优化第五套标准适用；创业板突出“三创四新”包容性；区域性股权市场则深化“专精特新”专板与链主企业对接机制。

Wu Qing revealed that the ChiNext Market will add a more precise and inclusive set of listing standards to better support the development of new industries, new formats, and new technologies, actively supporting the issuance and listing of high-quality innovative and entrepreneurial enterprises in the new economy and modern service sectors.

— Service models should be more diversified. The draft outline of the 14th Five-Year Plan clearly states, “Plan ahead for future industries,” which places higher demands on the service capacity of the capital market. Yang Chengzhang, Chief Economist at Shenwan Hongyuan Research, said that the capital market should accelerate the transformation from a financing-oriented financial model to a risk service model, establishing a multi-entity financial and technological intermediary risk-sharing mechanism, increasing the supply of technological asset securitization products, and better serving the development of future industries.