BEIJING/SHANGHAI, March 6 (Reuters) – China’s securities regulator said on Friday that reforms to Shenzhen’s startup board for growth companies are largely complete, as Beijing steps up efforts to secure more funding for domestic tech giants.
China Securities Regulatory Commission (CSRC) Chairman Wu Cheng said in a press conference that the board will adopt more precise and comprehensive standards to support new and high-quality companies.
He added that reforms will be announced when they are ready.
These statements were made on the sidelines of the annual session of China’s National People’s Congress, where Beijing promised to increase financial support for technology and innovation as competition with Washington intensifies in semiconductors, artificial intelligence and other advanced technologies.
Wu said the regulator will replicate the successful reforms in Shanghai’s Star Market and implement them in ChiNext. A key focus will be to introduce a pre-IPO review mechanism for qualified, high-quality innovative companies, especially those with breakthroughs in key core technologies, to shorten the waiting period for companies wishing to go public.
Wu added that the reforms will also allow eligible companies already under regulatory review to raise additional capital by placing shares to existing shareholders, and will adopt pricing mechanisms for issuing new shares.
“This will serve the local economy and private sector development well,” Wu said.
The CSRC had previously said it would reform ChiNext, but did not provide details.
Separately, China will create a national mergers and acquisitions fund to expand financing channels for startups, said Zheng Shanjie, head of China’s top economic planner, the National Development and Reform Commission.
Wu also said that China will extend the light asset, high research and development intensity recognition standards — currently applied to Star Market and ChiNext — to the big central board market, signaling a broader push to place more innovative companies on China’s stock exchanges.
Wu said that the structure of China’s financial affairs is undergoing profound changes.
During China’s 14th Five-Year Plan period, until 2025, the financing of shares and bonds in the exchange markets has reached 64 trillion yuan (9.3 trillion dollars), the share of direct financing has increased to 31.97 percent, which is an increase of 3.2 percent from the end of the 2016 five-year plan.
($1 = 6.9042 Chinese Yuan Renminbi)
(Reporting by Kevin Yao, Yukun Zhang, Xie Tang in Beijing and Samuel Shen in Shanghai. Editing by Clarence Fernandez and Mark Potter)
