Aug 30, 2024 | Beijing, China
In a significant move to bolster the country’s financial sector and support the growth of innovative businesses, a symposium on expanding the equity investment pilot for financial asset investment companies was held in Beijing on August 29. The event was organized by the National Financial Regulatory Administration (NFRA) in collaboration with the Beijing Municipal Government and the National Development and Reform Commission (NDRC).
Background and Purpose
The symposium aimed to thoroughly implement the spirit of the Third Session of the Twentieth Central Committee of the Communist Party of China and to advance the implementation of the Several Measures for Promoting the High-Quality Development of Venture Capital issued by the General Office of the State Council. The gathering underscored the importance of leveraging the strengths of state-owned large commercial banks to facilitate the flow of funds into new-quality productive forces.
Key Points from the Symposium
Recognizing the Importance of the Pilot Program
The meeting emphasized the significance of expanding the equity investment pilot program. Given China’s long-standing reliance on indirect financing, the program seeks to harness the technological and financial strengths, rich customer resources, strong risk identification capabilities, and comprehensive product systems of large state-owned commercial banks.
Policy Leadership and Development Environment
To optimize the development environment, the symposium highlighted the need for policy leadership and the exploration of a path for bank and insurance institutions to support technological innovation that is uniquely Chinese. The focus was on facilitating the funds-capital-assets cycle.
Strengthening Internal Management
The symposium called for financial asset investment companies to enhance their internal management and talent development. This would involve improving their professional level in venture capital and equity investment and establishing a comprehensive risk management mechanism. Additionally, the need for a sound due diligence and error correction mechanism was emphasized to enhance risk control effectiveness.
Tailored Financial Services for Tech Enterprises
The meeting stressed the importance of in-depth market research and the identification of high-quality projects. Financial service solutions should be customized for technology companies at different growth stages, focusing on early, small, long-term investments, and hard technology.
Beijing’s Role and Collaborative Efforts
The symposium recognized Beijing’s leadership in establishing a multi-level science and technology innovation finance organization system, a diverse financial product service system, and a multi-dimensional support system. The NFRA pledged to work closely with the NDRC, the People’s Bank of China, and the China Securities Regulatory Commission to build a finance system compatible with technological innovation and to support national scientific and technological tasks and small and medium-sized enterprises.
Official Statements and Contributions
During the symposium, officials from the NDRC, the People’s Bank of China, and the China Securities Regulatory Commission delivered speeches. Financial institutions shared their experiences in optimizing technology finance services and conducting equity investment pilot projects. Representatives from some of Beijing’s new-quality productive enterprises introduced their development and provided suggestions on financial service needs.
Conclusion
The symposium marked a pivotal step in China’s efforts to modernize its financial sector and support technological innovation. By expanding the equity investment pilot program, the country aims to create a more conducive environment for the growth of technology-driven businesses and foster a culture of innovation and entrepreneurship. The successful implementation of this pilot in Beijing is expected to serve as a model for future expansions across the nation.
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