Introduction: "A vibrant finance leads to a vibrant economy, and a stable finance ensures a stable economy."
Finance plays a crucial role in supporting the development of new quality productive forces.
At the same time, the characteristics of new quality productive forces have put forward four new demands on the financial system: First, the characteristic of new quality productive forces is innovation, and the objective reality that small and medium-sized science and technology innovation enterprises lead innovation requires financial services to intervene earlier in the development of enterprises; Second, new quality productive forces are driven by breakthroughs in technology clusters, and the diversified development trends of technology and industry require more diverse ways for finance to support the real economy; Third, the "new" in new quality productive forces lies in the reconstruction of the production function by data elements, which greatly enriches the means of production and objects of labor, requiring the financial industry to improve its digital level to adapt to it; Fourth, the development of new quality productive forces will trigger adjustments in the allocation of production factors, which requires further deepening of the reform of the capital market system.
However, the current financial system's problems in financing structure, service capacity, product supply, and institutional mechanisms have affected the strength and depth of financial support for the development of new quality productive forces.
In this regard, this paper proposes the following suggestions: First, further enhance the long-term attractiveness of the capital market and effectively increase the proportion of direct financing; Second, based on the construction of a compound talent team and the optimization of the valuation system, improve the comprehensive service level of financial support for scientific and technological innovation; Third, use a rich financial product as a starting point to improve the inclusiveness and accuracy of financial services for scientific and technological innovation; Fourth, focus on improving the institutional environment for the development of venture investment by unblocking venture capital exit channels and expanding long-term funding sources.
Main Text: As the once-in-a-century major changes accelerate, our country is facing an important historical juncture.
The new round of technological revolution and industrial transformation is advancing rapidly, creating new opportunities for China's economic development; at the same time, the factors of economic uncertainty both internally and externally have increased significantly, bringing new challenges to China's industrial transformationIt can be said that, under the traction of new quality productivity, data is to economic development what oil and electricity are to industrial economic development.
Given this, "new quality finance" that is adapted to the development requirements of new quality productivity should also increase its digitalization level.
On the one hand, financial institutions use big data, blockchain, and other technologies to improve the way information is collected and processed, which can alleviate the problem of market information asymmetry, is conducive to increasing market transparency, reducing investment risks, promoting information exchange between investors and enterprises, and thus better matching funding sources for innovative projects.
On the other hand, financial institutions simplify transaction processes through digitalization and financial innovation, which can significantly reduce transaction time and costs, and improve the efficiency of financial services.
This will enable more small and medium-sized enterprises (SMEs) and startups to enjoy financial services, increasing their opportunities to participate in market competition and technological innovation.
The development of new quality productivity will trigger adjustments in the allocation of factors of production, which requires further deepening of the reform of the capital market system.
The development of new quality productivity is inseparable from the new type of production relations that are adapted to it, which requires accelerating the market-oriented reform of factors.
Promoting the market-oriented allocation of capital factors and improving the capital market system is an important part of this.
In 2020, the State Council issued the "Opinions on Building a More Perfect System and Mechanism for the Market-oriented Allocation of Factors," proposing to improve the efficiency of factor allocation and promote changes in the quality, efficiency, and dynamics of economic development by promoting the market-oriented allocation of land factors and capital factors.
In 2024,Here is the translation of the provided text into English: ``` At the same time, the banking industry is the mainstay of our country's financial system.
Although it has inherent shortcomings in supporting technological innovation, it should take the initiative to create more diverse products and a more comprehensive risk coverage mechanism to reconcile this contradiction.
For example, in the process of commercial banks' investment and loan linkage, by introducing market-oriented debt-to-equity swaps or equity warrants, it can replace the direct investment of bank investment subsidiaries to obtain the excess returns of successful projects and to a certain extent compensate for the losses of failed projects.
This model can play a dual role in reducing the risk of scientific and technological innovation credit and increasing the risk tolerance of banks.
However, the current scale of credit flow to scientific and technological innovation enterprises in the banking system is relatively small, and the types of products are relatively single.
According to the People's Bank of China's "2023 Financial Institutions Loan Investment Direction Statistical Report", by the end of 2023, the balance of foreign currency loans for technology-based small and medium-sized enterprises was 2.45 trillion yuan, with a relatively fast year-on-year growth rate, but the absolute scale is small, accounting for 1.6% of the balance of foreign currency loans for enterprises and institutions.
In addition, innovative product services such as credit support products with "equity option rights" and innovative credit score loan systems are still in the process of exploration and improvement, with relatively few actual applications.
(IV) System and mechanism issues: There is a lack of institutional arrangements that are compatible with the life cycle of scientific and technological innovation enterprises.
First, the exit channels for venture capital investment in China are single and difficult, which reduces the willingness of financial support for innovation and suppresses the enthusiasm for capital investment in early and small stages.
Most of China's venture capital can only exit through IPOs, and there are insufficient other exit means.
According to statistics from Zero2IPO Private Equity, in 2023, China's venture capital and early-stage investment institutions exited a total of 205.375 billion yuan, of which 76.8% exited through IPOs and post-listing share reductions, and the proportion of equity transfers, mergers and acquisitions, buybacks, and liquidation exits were 12.8%, 8.1%, 1.8%, and 0.03%, respectively.
Moreover, the way of exiting through IPOs itself also has a large uncertainty.
Enterprises usually need to go through 8-10 years of development from the start-up to the IPO, especially when the IPO faces a phased tightening, and the difficulty of venture capital exiting through IPOs is further increased.
In addition, the return on exit of China's early-stage capital is relatively low, affecting the healthy development of the entire venture capital and equity investment industry.
The "China Private Equity (Venture Capital) Fund Exit Research Report" jointly released by Deloitte, Beijing Equity Exchange and other institutions shows that from 2018 to 2020, the average return on exit of China's private equity funds was 1.28 times, far lower than the 2.5 times exit return of the United States during the same period.
Looking at other exit means, although there has been some progress in institutional arrangements in recent years, the overall situation still cannot solve the liquidity problem for venture capital.
① China's institutional arrangements for regional equity markets to "transfer board" to the market are not perfect, and the utilization rate of the green channel for transferring to the market needs to be further improved.
② The means of equity transfer in China's private equity secondary market are insufficient.
Although regional equity markets have carried out pilot institutional arrangements for equity investment and venture capital fund share transfers, the actual scale of share transfers is relatively low.
At present, the China Securities Regulatory Commission has successively allowed regional equity markets in seven places, including Beijing, Shanghai, Guangdong, Zhejiang, Ningbo, Jiangsu, and Anhui, to carry out pilot work for the transfer of private fund shares.
As of July 14, 2024, the Beijing Equity Exchange fund share transfer platform has a total of 88 fund share transfers online, with 60 transactions completed, and a total transaction amount of 4.443 billion yuan; the Shanghai private equity and venture capital share transfer platform has a total of 103 fund shares online, with 84 transactions completed, and a total transaction amount of approximately 21.412 billion yuan.
③ The return on equity investment through mergers and acquisitions in China is relatively low compared to IPO exits, and there are fewer potential buyers in the market, making the actual operation difficult.
In mature capital markets, the prices of the secondary stock trading market are relatively fair, and the gains obtained from mergers and acquisitions will not be significantly lower than the gains from IPO exits.
Mergers and acquisitions are the main way for funds to exit in countries such as the UK and the US.
Second, there is a lack of institutional arrangements for long-term funds to invest in equity venture capital funds, which makes the process of financial support for the growth of scientific and technological innovation enterprises lack "patient capital".
The insufficient supply of long-term funds in China leads to insufficient development of private equity funds and short-term investment behavior.
Long-term funds such as pension funds, insurance funds, and state-owned capital pursue long-term stable returns, which are in line with the long-term investment and capital market value investment concepts of equity and venture capital funds.
Therefore, in mature markets, long-term funds are the main source of funds for investing in equity venture capital funds.
Due to policy constraints, evaluation systems, and low-risk preferences of fault-tolerant systems, the scale of long-term funds participating in equity investment in China is not high.
For example, the current scale of social security funds investing in equity venture capital funds is relatively small.
In the cumulative investment of China's social security funds, the proportion of investment in venture capital funds is only 3.4%, far lower than the 8.9% of private equity allocation by US pension funds and 32% in Canada.
Although the "National Social Security Fund Domestic Investment Management Measures (Draft for Comments)" released by the Ministry of Finance at the end of 2023 proposed that the social security fund will carry out direct equity investment and private equity fund investment, and at the same time give clear investment limits, the specific implementation and long-term funds "entering the market" still need time.
IV.
Countermeasures for Financial Support for the Development of New Quality Productive Forces (I) With the goal of enhancing the long-term attractiveness of the capital market, improve the capital market functions that coordinate investment and financing, and increase the proportion of direct financing.
Only by enhancing the long-term attractiveness of the capital market can the proportion of direct financing be effectively increased.
This not only requires the improvement of the capital entry and exit mechanisms in the primary market, providing financing convenience and reasonable valuation for scientific and technological innovation enterprises while timely clearing out inferior enterprises, continuously improving the quality of listed companies, and continuously guiding the flow of factor resources to the best enterprises; it also needs to enhance the stability of investment value in the secondary market, enabling investors to share the dividends of the growth of scientific and technological innovation enterprises, and thus ensuring a continuous flow of funds into the capital market and flowing into the field of new quality productive forces.
Specific measures can be taken from the following three aspects: First, while strictly controlling the entry, retain the "green channel" for financing for scientific and technological innovation enterprises, and establish a number of typical cases of scientific and technological innovation enterprises that have gone public using the green channel.
Strengthen policy coordination among relevant departments, give priority to supporting scientific and technological innovation enterprises that have broken through key core technologies to go public and raise funds, establish and improve the "green channel" mechanism, and implement a policy of "reporting and reviewing, and issuing upon review".
At the same time, coordinate the functional positioning of each plate to meet the financing needs of scientific and technological innovation enterprises of different types and stages of development, support the establishment of service bases in qualified cities by the Beijing, Shanghai, and Shenzhen exchanges, and provide more precise services for scientific and technological innovation enterprises.
In particular, pay attention to the construction of the Beijing Stock Exchange, promote the high-quality "expansion" of the Beijing Stock Exchange, moderately increase the inclusiveness of the market access of the Beijing Stock Exchange, and attract and cultivate a group of innovative small and medium-sized enterprises to go public.
Second, smooth the exit by strictly implementing the delisting system.
Increase the clearance of long-term "poor performance" companies, companies that occupy capital for a long time, and companies that engage in financial fraud; optimize multiple delisting channels; build a good local equity trading platform to take over the channels of delisted companies from the National Equity Transfer System (New Third Board); strengthen the coordination of the China Securities Regulatory Commission, exchanges, and local governments to jointly handle investor protection issues during the company's delisting process.
Only by smoothing the exit can the market "flow without decay" and "orderly entry and exit", can the quality of listed companies be effectively improved, can investors be willing to enter the market to participate in investment, and can there be more funds to support the development of scientific and technological innovation.
Third, strengthen the supervision of listed companies, increase the handling of illegal and irregular behavior, and encourage public participation in the supervision process.
On the one hand, further standardize the behavior of major shareholders to reduce holdings, and strengthen the supervision of company information disclosure; on the other hand, improve the mechanisms for discovering clues and rewarding reports, and learn from the "whistleblower" reward system, "whistleblower" protection, and the regulatory system's response process and mechanism for reporting behavior of the U.S. Securities and Exchange Commission, etc., to further optimize China's "whistleblower" system.
The focus is to further refine the standards for effective reporting behavior and strengthen the protection measures for "whistleblower" rights on the premise of significantly increasing the reward standards.
(II) Based on the construction of compound talent teams, optimization of valuation systems, and improvement of digitalization levels, improve the comprehensive service level of financial support for scientific and technological innovation.
First, strengthen the construction of compound talent teams in the financial industry.
Encourage financial institutions to focus on key areas, establish internal professional investment teams; strengthen exchanges and cooperation with external professional organizations, and form external expert consulting teams that can respond quickly to cognitive needs.
For example, explore the establishment of research team service mechanisms, relying on the judgment of external economists, industry experts, and internal think tanks, to comprehensively complete enterprise value assessment and investment plan decision-making.
Encourage financial institutions to introduce a series of training courses for scientific and technological innovation finance, popularize basic business knowledge in different scientific and technological innovation fields, share scientific and technological innovation industry research results, enhance the ability of employees to provide services for scientific and technological innovation finance, and improve the reserve and training mechanism for compound talents.
Second, optimize the valuation evaluation system for scientific and technological innovation enterprises.
It is recommended to promote the China Asset Appraisal Association to study and introduce detailed guidelines and guidelines for the use of evaluation methods.
Focus on indicators such as "R&D investment, scientific and technological personnel, invention patents, and property rights transformation" to form a scientific and systematic evaluation system for the growth attributes of enterprise scientific and technological innovation, set up an entry basic score, and make the definition of scientific and technological innovation attributes quantifiable and evaluable, to avoid a large difference between the book value and the evaluation value of enterprises due to some assets of scientific and technological innovation enterprises being unrecognizable or difficult to confirm and measure in accounting.
Third, strengthen the construction of digital infrastructure in the financial field.
On the one hand, explore the establishment of a regular sharing mechanism for enterprise information, and promote the opening and sharing of enterprise innovation and research and development information.
On the other hand, financial institutions themselves should also actively use technological innovations such as artificial intelligence, cloud computing, big data, and blockchain to achieve digital transformation, reduce information differences, and improve the efficiency of financial services.
For example, establish and improve the bank's customer relationship management system, integrate bank business and customer information, accurately portray scientific and technological innovation enterprises, understand the real financial needs of scientific and technological innovation enterprises.
Through digital transformation, reshape the risk control model of the financial system and improve the efficiency of risk identification and control.
``` Please note that the translation provided is a general translation and may not cover all the nuances of the original text.
It is also quite lengthy due to the complexity and length of the original content.
(III) Leveraging a rich array of financial products to enhance the inclusiveness and precision of financial services innovation in the technology sector.
From the perspective of the direct financing system, efforts should be intensified to supply financial products that align with the characteristics of technology innovation enterprises, advancing both on- and off-exchange markets, and balancing the importance of financing and refinancing, as well as equity and bond markets.
1.
Grasping the characteristic of technology innovation enterprises having a high amount of intangible assets, vigorously develop structured financial instruments based on intellectual property rights as the underlying assets.
2.
Further enrich the variety of on-exchange options and futures, and improve the off-exchange derivatives market.
3.
Increase support for refinancing of technology innovation enterprises, and promote the efficient implementation of mergers and acquisitions.
Accelerate the establishment of a shelf issuance system for the technology innovation board and the growth enterprise market to enhance the effectiveness and convenience of refinancing.
At the same time, encourage listed technology innovation enterprises to raise funds through the issuance of shares or convertible bonds, and carry out mergers and acquisitions focusing on strengthening and complementing the industrial chain.
4.
Strengthen the precision support of the bond market for technological innovation.
Support technology innovation enterprises to issue technology innovation notes, and science and technology innovation corporate bonds, guide non-listed technology innovation enterprises to issue technology innovation notes with rights (conversion conditions), etc.
; promote technology innovation enterprises to directly finance through intellectual property securitization products.
At the same time, high-quality corporate bonds can be included in the benchmark market-making varieties to guide and promote investors to increase investment in technology innovation bonds.
In addition, encourage policy institutions and market institutions to provide credit support for private technology enterprises to issue technology innovation bonds.
Looking at the indirect financing system, commercial banks should take the initiative to enrich products while optimizing incentive mechanisms.
1.
Increase the supply of bank technology credit products and expand the scale of technology credit.
Make good use of the incentive role of monetary policy tools such as re-lending for scientific and technological innovation and technical transformation, encourage commercial banks to include service to scientific and technological innovation in their strategic planning, and increase credit investment in technology innovation enterprises.
For technology enterprises in the start-up phase, develop loans with risk sharing and compensation to improve the "first loan rate" of technology enterprises.
For technology enterprises in the growth phase, actively expand the scope of mortgage collateral, and encourage the development of supply chain finance, intellectual property pledge financing, and other businesses.
Reference can be made to the experience of mature markets to improve intellectual property pledge financing and evaluation management, relax restrictions on the types of intellectual property that can be pledged, and simplify the procedures for confirming rights, etc.
For example, in the United States, there are no restrictions on the types of intellectual property that can be pledged, and various types of intellectual property can be pledged in combination, and the pledge registration adopts a "notification registration system", reducing the registration process; Japan also allows enterprises to pledge patents, design rights, trademark rights, etc.
in combination.
For technology enterprises in the mature phase, encourage support for market-oriented mergers and acquisitions through merger loans.
2.
Improve differentiated technology credit management and assessment mechanisms.
Encourage commercial banks to establish a financing exclusive evaluation system for technology enterprises with corporate innovation ability as the core indicator, implement differentiated credit approval mechanisms, and enhance the credit ability for small and medium-sized technology enterprises.
Promote the construction of professional or characteristic branches of technology finance by banks, and appropriately delegate credit approval and product innovation authority.
Promote the development of a due diligence exemption system for technology finance, and establish a negative list for due diligence exemption.
(IV) Optimize the institutional environment for the development of venture investment by focusing on unblocking venture capital exit channels and expanding long-term funding sources.
First, improve diversified exit channels such as agreement transfer and merger and acquisition transactions to address the concerns of funds that invest early and small.
Facilitate the transfer and exit channels of equity investment and venture capital fund shares.
Support the expansion of the scope of the private equity secondary market fund share transfer pilot, provide policy incentives for S fund managers who meet certain conditions, encourage various market entities to participate in the share transfer pilot, and encourage the establishment of an S fund professional committee.
Facilitate the merger and acquisition exit channels of equity investment.
Improve the legal system related to mergers and acquisitions, optimize the tax policy related to mergers and acquisitions, and improve the applicable standards for natural person shareholders, the applicable situation of various innovative payment tools, and the applicable standards for cross-border reorganizations, to promote the simplification and optimization of the merger and acquisition process.
Second, guide and expand the funding sources of venture capital funds through optimizing tax, regulatory, fault tolerance, and assessment mechanisms, and encourage long-term funds such as social security funds, insurance funds, and state-owned capital to invest in venture capital funds.
In terms of tax optimization, improve the tax incentive policies for investing in venture capital funds and relax the deduction conditions for the tax accounting method of investing in venture capital funds.
In terms of regulatory constraints, moderately relax the restrictions on long-term funds such as pension funds, insurance funds, and corporate annuity funds investing in venture capital funds, support the national social security fund and local social security funds to moderately increase the actual allocation ratio of private equity venture capital funds, and allow insurance institutions with strong risk control capabilities to directly invest in private equity investment funds.
In terms of fault tolerance mechanisms, improve fault tolerance mechanisms through reasonable differentiated use conditions and exemption clauses to increase the enthusiasm of state-owned capital.
In terms of assessment mechanisms, optimize the assessment mechanisms for long-term fund investment institutions and teams, and encourage the formation of long-term investment and allocation strategies.
