China Securities Regulatory Commission Photo: CFP

Chinese officials on Thursday intensively voiced support for the development of new quality productive forces with the high-quality development of the capital market, especially after the top securities regulator vowed to give priority to the financing of companies that break foreign strangleholds in core technologies.

The capital market will play an increasingly important role in China's economy. Only by improving the mechanism of the capital market and enhancing its capability of serving the real economy can the capital market better support the development of new quality productive forces and contribute to a stable economic recovery, analysts said.

The China Securities Regulatory Commission (CSRC) will further carry out comprehensive reform and opening-up of the capital market, with efforts to improve mechanisms in areas including IPOs, merger and acquisition (M&A) deals, as well as private equity and venture capital funding to increase the institutional competitiveness of China's capital market, Zhou Xiaozhou, an official of the CSRC, said at a forum held in Beijing on Thursday, the Shanghai Securities Journal reported.

Zhou said that the authorities will implement 16 measures that the CSRC has announced to better serve sci-tech companies, and it will give priority to the financing of companies that break foreign strangleholds in core technologies.

In 2023, A-share sci-tech companies that are engaged in next-generation technologies, new energy and other emerging industries disclosed more than 1,100 M&A deals, with transactions exceeding 360 billion yuan ($49.69 billion), according to Zhou.

Gao Dongsheng, chief economist of the Ministry of Industry and Information Technology, said at the same forum that the ministry will step up support for the development of industry-leading companies, nurture unicorn companies, and spark the emergence of more small and medium-sized tech firms so as to improve the quality of companies for the high-quality development of the capital market.

Driven by effective investment, the development of new quality productive forces in China is picking up speed, and as a result the medium- and high-end manufacturing sectors are seeing a faster growth. 

According to the National Bureau of Statistics, the value added of equipment manufacturing increased by 9.9 percent year-on-year in April, 3.9 percentage points faster than that of the previous month. The value added of high-tech manufacturing increased by 11.3 percent, 3.7 percentage points faster.

In order to enhance the capital market's capability of supporting the development of the new quality productive forces, the authorities should formulate targeted policies to encourage innovations in talent, financial products, services and management, Bian Yongzu, a senior industry research fellow, told the Global Times on Thursday.

Since the development mode of sci-tech companies in strategic and emerging industries is different from traditional companies, their needs in these aspects are also different, Bian said. For example, efforts are needed to develop patient capital to support long-term investment in new quality productive forces, he said.

A Communist Party of China Central Committee Political Bureau meeting held on April 30 pointed out that multiple measures should be taken to promote the sound development of the capital market, stressing that it is essential to actively develop venture capital investment and strengthen patient capital.

"We should give better play to the role of the capital market and earnestly implement the registration-based IPO mechanism so as to smoothen the liquidity channel and better guide much-needed capital to support the real economy and provide stable, sustainable financing for the development of new quality productive forces," Dong Yun, a deputy director of the fintech department of the Institute of Finance and Banking at the Chinese Academy of Social Sciences, told the Global Times.

More efforts should be made to strengthen connections among the multi-faceted capital markets and build a major bastion for servicing small and medium-sized innovation-oriented enterprises, Dong said.

With the Chinese economy at a critical stage of structural reform and high-quality development, the capital market has vast development potential, Bian said.

He said that China is an ideal investment destination for holders of foreign capital who have recognized risks in Western markets and seek a market with more stability.

Recently, several financial institutions briskly hiked investment in the Chinese market, eyeing greater opportunities brought by the development of new quality productive forces. 

As of Monday, 10 foreign-controlled securities firms, nine wholly owned foreign fund management companies and three foreign-controlled futures companies had obtained approval to operate in China, according to media reports.