One Year Anniversary of the New Science and Technology Innovation Bonds Policy: Continued Policy Support, 2.6 Trillion "Lifeblood" Flows into Hard Technology

One Year After the New Policy on Science and Technology Innovation Bonds: How Can It Help Break Through Financing Bottlenecks for Hard Tech?

Interface News Reporter | Zou Wenrong

The implementation of the Science and Technology Innovation Bond Board in the bond market has been a year.

On May 7, 2025, the People’s Bank of China and the China Securities Regulatory Commission jointly issued an announcement supporting the issuance of science and technology innovation bonds (hereinafter referred to as the “New Policy on Science and Technology Innovation Bonds”). The three major exchanges and the Securities Association of China simultaneously introduced supporting measures to further expand the scope of issuers and the use of raised funds, and to improve supporting mechanisms. The science and technology innovation bond board officially entered a new stage of quality improvement, rapid growth, and expansion.

Wind data shows that since the launch of the science and technology innovation bond board in May 2025, the enthusiasm for issuing science and technology innovation bonds has significantly increased. A total of 1,009 issuers have issued 2,396 science and technology innovation bonds, with a total issuance scale of 2.61 trillion yuan. The issuance amount increased by 110.85% year-on-year; among them, in 2026, an additional 26.1k yuan of science and technology innovation bonds were issued, an increase of 84.39% year-on-year.

Among the more than 1,000 issuers, technology-based companies issued over 2 trillion yuan, accounting for more than 80%; commercial banks and securities firms together issued over 400 billion yuan; equity investment institutions issued over 100 billion yuan, achieving diversification of bond issuers.

Image source: Wind

Previously reported by Interface News, this new policy on science and technology innovation bonds not only added support for financial institutions such as commercial banks, securities firms, and financial asset investment companies as issuers of science and technology innovation bonds, broadening the scope of financial institutions’ technology loans, but also added support for equity investment institutions to raise funds for private equity funds, thereby driving more capital to early-stage, small, long-term, and hard tech investments.

For example, in the private venture capital sector, since June 2025, private venture capital institutions such as Zhongke Chuangxing, Junlian Capital, Orient Fuhai, Yida Capital, Jinyu Maowu, Jishi Capital, Tongchuang Weiye, Shengjing Jiacheng, Daohe Long-term, Qianrong Capital, and Leishi Investment have successively issued their first science and technology innovation bonds, with a total issued amount reaching 2.64 billion yuan.

Wang Qiwen, CEO and Partner of Cornerstone Capital, told Interface News that science and technology innovation bonds are becoming an important tool for private venture capital institutions to serve national technological innovation. These institutions can provide more sufficient, stable, and patient support for science and tech companies with long R&D cycles, heavy capital investment, and complex growth curves through longer-term and sustainable funding arrangements.

“Compared to early-stage financing methods like ‘double innovation bonds,’ this time’s science and technology innovation bonds effectively solve issues of small scale, short duration, and difficulty in credit enhancement, injecting long-term and stable capital into the venture capital industry,” Wang Qiwen said.

As the second batch of private venture capital institutions issuing science and technology innovation bonds, it is reported that Cornerstone Capital issued bonds with a total registered amount of 1.5 billion yuan, with an initial issuance scale of 400 million yuan, adopting a “5+3+2” maturity structure, with a credit rating of AA+ for the issuer and AAA for the bonds, and a coupon rate as low as 2.10%.

Wushuangning, CFO of Cornerstone Capital, also told Interface News that the support guarantee from China Bond Credit Enhancement Investment Co., Ltd. (hereinafter referred to as “China Bond Credit Enhancement”) for the second batch of issuers has been further optimized. Issuers can pledge their assets to China Bond Credit Enhancement for counter-guarantees, simplifying guarantee procedures and reducing guarantee fees. “The key to successful issuance by private venture capital institutions is the support and participation of China Bond Credit Enhancement. Previously, financing options for private venture capital institutions were very limited. The science and technology innovation bonds promoted mainly by the central bank are effective support.”

The new policy on science and technology innovation bonds not only enriches the scope of issuers but also creates risk-sharing tools for these bonds. The People’s Bank provides low-cost re-lending funds to purchase science and technology innovation bonds, and together with local governments and market-based credit enhancement agencies, adopts diversified credit enhancement measures to share the risk of bondholder default losses.

Xu Yang, a researcher at United Credit, said that the establishment of the science and technology innovation bond board fills a key gap in the direct financing system of science and technology finance. By achieving “dual-wheel drive” of equity and bonds, it provides a solid institutional guarantee for building a normalized and long-term support mechanism for technological innovation.

According to his analysis, by the end of 2025, China’s stock market’s STAR Market has gathered over 600 listed companies with a total market value exceeding 10 trillion yuan, but the total fundraising amount is only 1.1 trillion yuan. If based on China’s strategic goal of reaching a R&D expenditure intensity of over 3.2% by 2030, the annual R&D investment in society will then surpass 5 trillion yuan.

“Faced with a normalized annual R&D funding demand of trillions of yuan, relying solely on equity financing is clearly insufficient to meet the huge capital gap across the entire lifecycle of tech companies. It is especially important to leverage the existing financial system and the bond market’s role as the main direct financing platform,” Xu Yang told Interface News.

The diversified financing methods built in the primary market not only attract a large amount of “fresh water” for the tech sector but also provide abundant trading targets for the secondary market, effectively enhancing the liquidity of the science and technology innovation bond market.

On the institutional level, the Shanghai and Shenzhen stock exchanges have optimized market-making and trading mechanisms for science and technology innovation bonds, appropriately increased the discount factor for bond pledges, guided investment institutions to increase their investments in these bonds, supported public fund management companies to create ETF products based on science and technology innovation bonds, and reduced related trading and settlement costs;

On the product level, as of the end of April 2026, a total of 24 science and technology innovation bond ETFs have been successfully launched, with a combined scale of over 270 billion yuan;

On the market-making level, a search of securities firms’ annual reports shows that during the reporting period, firms such as China International Capital Corporation, Guosen Securities, China Merchants Securities, China Galaxy Securities, Industrial Securities, and Orient Securities all mentioned their market-making activities for science and technology innovation bonds.

For example, Guosen Securities (002736.SZ) disclosed in its annual report that as one of the first market-making institutions for benchmark bonds and science and technology innovation bond ETFs, in 2025, the company successfully created the “Guosen Securities Greater Bay Area Enterprise Science and Technology Innovation Bond Basket” in the interbank market and maintained continuous bilateral quotes.

Orient Securities (600958.SH) stated that during the reporting period, market-making for 22 science and technology innovation bond ETFs received an A-level or above rating. Meanwhile, the company increased its market-making coverage for non-equity ETF products, with the number of market-making products rising sharply to 42, successfully ranking among the industry leaders in bond ETF market-making.

“Ample liquidity in the secondary market not only reduces trading costs for investors but also effectively facilitates price discovery, helping market funds realize asset value exploration,” Xu Yang observed. “From the spread analysis, the yield spread for issuers of science and technology innovation bonds is about 6 basis points lower than that for non-innovative entities. Even for the same issuer, the spread for science and technology innovation bonds is about 5 basis points lower than for ordinary bonds. This indicates that, under the dual benefits of ‘science and technology issuer + innovative product,’ the spreads of science and technology innovation bonds are over 10 basis points lower than those of ordinary bonds issued by non-innovative entities, reflecting market recognition of bonds labeled with ‘science and technology’.”

The reporter notes that on March 2, 2026, the Securities Association of China issued a document further optimizing the mechanism for science and technology innovation bonds (“Notice on Further Optimizing the Mechanism for Science and Technology Innovation Bonds” [CSAA Issuance 〔2026〕40], hereinafter “the 40th document”), from multiple dimensions including enterprise recognition standards, use of raised funds, bond durations, to strengthen support for the issuance of medium- and long-term science and technology innovation bonds by growing and mature tech companies, and for increasing investment in technological innovation.

For example, regarding recognition standards and fund use, the 40th document expands the scope to include “7+6” categories of enterprises evaluated by ministries and commissions, and links R&D investment with flexible fund use, guiding funds to truly flow into R&D.

In terms of supporting mechanisms, the 40th document builds a full-chain support system covering issuance facilitation, intermediary services, and investment assessment. It encourages equity investment institutions to adopt “regular issuance plans” and flexible issuance mechanisms to improve issuance flexibility and convenience. To support “hard tech” companies directly issuing bonds, the document explicitly encourages lead underwriters to actively serve enterprises in key fields such as artificial intelligence and integrated circuits, and to introduce unicorns and gazelles in hard tech to issue bonds. It also encourages rating agencies to improve rating methodologies for the tech innovation industry.

“Since the launch of the bond market science and technology board in May 2025, the issuance scale of bonds for tech innovation companies has grown significantly, becoming an important support for tech enterprises in the capital market,” said Yu Lifeng, Executive Director of the Research and Development Department at Orient Jin Cheng, in an interview with Interface News. “This mechanism’s further optimization will help address some structural financing issues existing in the current science and technology innovation bond market.”

However, from the perspective of issuer structure and bond durations, Yu Lifeng believes that issues still exist, such as the dominance of high-rated state-owned enterprises and large leading private companies, and the mismatch between bond durations and the longer-term capital needs of tech companies.

To improve these issues, Yu Lifeng suggests: first, innovate product structures, encourage the issuance of hybrid equity-debt products, allowing bond investors to share in equity appreciation, balancing risk and return; second, support the expansion of guarantee, credit enhancement, and credit protection tools to provide credit support for more issuers with core technological potential but lower credit ratings; third, strengthen market cultivation, diversify investor types, and increase the proportion of high-risk appetite investors and long-term funds; fourth, continue to enhance investor protection systems, encourage financial asset management companies to participate in asset restructuring of tech companies, and improve default resolution efficiency.