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 investment and financing in the capital market,” “Accelerate the development of a well-functioning capital market,” “Improve 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 the comprehensive reform of investment and financing as the driving force, continuously improve the inclusiveness and adaptability of the system, 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 “M&A six 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 its ability to serve technological innovation, paving the way for the growth of tech startups. More innovative seeds are taking root and blossoming 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. (“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 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 stepping steadily into 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’s revenue grew 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.

Member of the National Committee of the Chinese People’s Political Consultative Conference and Vice President of Southern University of Science and Technology Jin Li believes that through valuation and pricing mechanisms, the capital market can break the dependence on traditional paths, 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 it is cultivating and expanding emerging industries, proactively planning for future industries, or innovating and greening and intelligent transformation of traditional industries, further leveraging the functions of the capital market is needed to accelerate the integration of technological and industrial innovation,” 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 proposed strengthening financial services across the entire chain and lifecycle of technological innovation. For key core technology enterprises, a normalized “green channel” mechanism for listing financing and mergers and acquisitions will be implemented to support innovation through financial technology.

National People’s Congress representative and Peking University Bo Ya Distinguished Professor Tian Xuan said that the capital market precisely targets technological frontiers and industrial upgrading needs. By optimizing systems for IPOs, refinancing, and mergers and acquisitions, it enhances 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 at our company’s development, the capital market has provided us with a full-chain relay service 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 innovation.

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

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 the inclusiveness and adaptability of the system, 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 factors and resources into new productive forces? Many delegates and committee members have offered suggestions:

— Make listing standards more inclusive. Jiang Haoran, Chairman of Hengyin Financial Technology Co., Ltd., suggested further improving diversified listing standards centered on market value, R&D investment, core technology, and market share, making them more aligned with the development laws and industry characteristics of enterprises, so that more innovative companies in growth and R&D stages can access the capital market.

— Make sector positioning more precise. Tian Xuan said that focusing on the precision of institutional supply and accelerating the construction of differentiated support systems covering the entire enterprise lifecycle are necessary. The Beijing Stock Exchange should strengthen its role in cultivating “little giants” in specialized and innovative small and medium-sized enterprises; the STAR Market should adhere to its “hard technology” positioning and optimize the application of the fifth set of standards; the ChiNext Board should emphasize inclusiveness for “three innovations and four new” enterprises; regional equity markets should deepen the connection mechanisms between specialized and innovative boards and leading enterprises.

Wu Qing revealed that the ChiNext Board will add a more precise and inclusive set of listing standards to support the development of new industries, new formats, and new technologies. It will actively support high-quality innovative and entrepreneurial enterprises in new consumption, modern service industries, and other fields to go public on the ChiNext.

— Service models should be more diverse. 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 of Shenwan Hongyuan Research, said that the capital market should accelerate its transformation from a financing and financial mode to a risk service mode, establishing a multi-financial institution and technology service intermediary joint risk-sharing mechanism, increasing the supply of technology-based asset securitization products, and better serving the development of future industries.