Enhance Institutional Inclusiveness and Adaptability; Capital Markets Support Technological Innovation

Xinhua News Agency, Beijing, March 18 — The article “Enhancing Systemic Inclusiveness and Adaptability: Capital Markets Support Technological Innovation” was published in China Securities Journal on March 18. The article states, “The 14th Five-Year Plan clearly emphasizes strengthening the inclusiveness and adaptability of the capital market system.” This statement outlines a clear roadmap for the reform and development of the capital market over the next five years.

Recently, the China Securities Regulatory Commission (CSRC) has clarified plans to deepen the GEM (Growth Enterprise Market) reform and optimize refinancing mechanisms. In the long term, a series of measures—including high-quality development of a “Science and Technology Board” within the bond market, deepening market-oriented mergers and acquisitions reforms, and promoting the effective functioning of a multi-level capital market system—will help the capital market serve industrial transformation and high-quality development with new momentum.

Precise Support for the “New Economy”

Enhancing the inclusiveness and adaptability of the capital market system is crucial for helping tech companies pursue “quality” in the “new” economy.

As CSRC Chairman Wu Qing has said, in recent years, a new wave of technological revolution and industrial transformation has accelerated globally, with major capital markets actively reforming to adapt to innovation trends. From China’s perspective, whether cultivating emerging industries, proactively planning for future sectors, or innovating and green- and intelligent-transforming traditional industries, further leveraging the functions of the capital market is necessary to accelerate the integration of technological and industrial innovation.

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However, the current profit-oriented listing standards are no longer sufficient to fully cover the growth paths of new economy enterprises. Industry insiders analyze that high-quality enterprises in new industries, new business models, new technologies, as well as in new consumption and modern service sectors, are rapidly growing, but their business models, profit rhythms, and asset characteristics differ significantly from traditional manufacturing. Therefore, it is necessary to establish more precise and inclusive listing standards to expand systemic coverage, enhance direct financing services, and continuously promote inclusive reforms that focus on supporting the “new economy.”

Additionally, some reforms at the tool level are urgently needed. For example, the current A-share refinancing system still has room for optimization in terms of financing efficiency, issuance pricing, and participation of medium- and long-term funds. Some listed companies, during industry expansion, mergers, and ongoing R&D investments, have a clear demand for more flexible and market-oriented financing tools.

Yao Pei, Chief Strategy Analyst at Huachuang Securities, stated that the “14th Five-Year Plan” explicitly aims to significantly improve the level of technological self-reliance and self-strengthening, and directly addresses the long-term issues of system inclusiveness and adaptability in the capital market, laying a solid foundation for resource aggregation into new productive forces. It is foreseeable that reforms supporting technological innovation in the capital market will continue to advance.

Accelerating the Formation of Innovative Capital

Looking from a broader perspective, the reforms planned for the first year of the “14th Five-Year Plan” have already been deployed. Focusing on serving the development of new productive forces, the CSRC recently proposed two specific measures: releasing a plan to deepen GEM reform and accelerating the optimization of refinancing mechanisms.

Deepening GEM reform is an incremental policy to improve the functional positioning of the capital market segments. Many market participants believe that the core of the reform is to adapt to China’s support for technological innovation and future industrial development needs.

Tao Shengyu, Non-Banking Chief Analyst at Donghai Securities, believes that deepening GEM reform is a top priority for the capital market in 2026. The focus should be on “highlighting positioning, copying successful experience, and full-chain regulation,” including: establishing more inclusive listing standards, weakening traditional profit constraints, covering high-growth, light-asset enterprises in new consumption and modern services, and solving the “listing difficulty” for quality innovative companies; fully replicating the mature experience of the STAR Market, introducing pre-IPO review mechanisms and policies for existing shareholders’ capital increases, significantly shortening review cycles, and alleviating early-stage funding pressures. These measures will promote the transformation of the GEM from solely supporting hard technology to broadly serving the economy, forming a complementary relationship with the STAR Market and accelerating the formation of innovative capital.

Refinancing reforms also play a vital role. Key measures such as “optimizing strategic investor recognition standards,” “launching shelf issuance,” and “improving lock-in pricing mechanisms” are targeted at the core issues.

Xu Chi, Chief Strategy Analyst at Zhongtai Securities Research Institute, analyzed that shelf issuance and streamlined procedures are expected to improve financing efficiency, benefiting listed companies with ongoing financing, M&A, and industry chain expansion needs; improving lock-in pricing mechanisms and aligning issuance prices with market prices can help reduce excessive discounts, minimize dilution of secondary market shareholders’ interests, and better balance the relationships between issuers and investors; optimizing strategic investor recognition and encouraging participation from social security funds and other medium- and long-term funds can shift refinancing sources from short-term arbitrage funds to long-term allocation funds, enhancing market pricing quality and the “long-term investment” nature of the capital market.

Establishing the “Technology Narrative” Logic for A-shares

In the short term, reforms are imminent, but long-term institutional development requires a holistic and systematic approach. From a medium- to long-term perspective, establishing a “technology narrative” for A-shares involves further clarifying the boundaries of market segments, deepening IPO and M&A market-oriented reforms, and cultivating a more inclusive market ecosystem to support the full lifecycle and comprehensive growth of tech enterprises.

In terms of equity financing, the multi-level capital market system needs continuous improvement.

Professor Tian Xuan, a distinguished professor at Peking University, suggested that efforts should be made to clarify the boundaries of the STAR Market, ChiNext, and Beijing Stock Exchange, continuously optimize listing standards for tech and innovative SMEs, simplify review processes, and improve listing efficiency to provide precise financing channels for different types of enterprises. Accelerating the connectivity of multi-level markets, improving transfer mechanisms, and supporting companies to choose their listing segments flexibly according to their development stages will facilitate a gradient growth from startup to maturity.

Tian Xuan also emphasized the need to deepen market-oriented reforms of IPOs and M&A, promote IPO pricing to reflect market supply and demand, and tilt M&A towards key industries of new productive forces. Establishing special funds to reduce M&A costs and accelerate industrial integration and upgrading are also crucial. Achieving efficient coordination of investment and financing functions through “high-efficiency access + market-oriented integration” will facilitate direct financing channels, optimize industrial resource allocation, and strengthen the capital market’s role in nurturing new productive forces.

Enhancing systemic inclusiveness and adaptability should not rely solely on the equity market but also promote the effective functioning of bond, futures, and options markets.

The bond market’s “Science and Technology Board” is expected to advance further. Galaxy Securities believes that the “14th Five-Year Plan” details the path for deep integration of technological and industrial innovation, and the issuance of sci-tech innovation bonds by tech enterprises will inject new vitality into the bond market.

In the areas of futures, derivatives, and asset securitization, continuous improvement of relevant laws, regulations, and regulatory systems is necessary. Expanding product varieties to meet investors’ diverse risk management and investment needs will enhance financial services for the real economy and risk management, providing full-cycle financial support for technological innovation, according to Li Qiusuo, Chief Strategy Analyst at China International Capital Corporation’s research department.