Innovation in the financial sector serves as a cornerstone in promoting China's modernization as there is a growing need for wealth management and fundraising for the technology sector, said Wu Xiaoqiu, former vice-president of the Renmin University of China and dean of the China Capital Market Research Institute.

Wu made the remarks on Wednesday during an interview at the Boao Forum for Asia Annual Conference 2023, a China-led equivalent of the World Economic Forum held every year in Davos, Switzerland.

"As China entered a stage of modern financial development, demand among residents for wealth management has been rising significantly. This demand goes beyond simply depositing money," Wu said.

"It's also crucial for the country to drive industrial upgrades and iterations in its pursuit of modernization, which requires accelerated efforts in building a more diversified financial landscape to meet high-tech companies' needs."

In China's vision of modernization, the country aims to build a great modern socialist country by the middle of this century, making it imperative to secure sustainable economic growth through technological innovations and advance law-based governance in all aspects.

"Financing for the technology sector is essential because, without industrial upgrades and technological progress, it would be difficult for traditional industries to bring China into the era of modernization by hinging on resource-based enterprises," he said.

Last month, China's financial market brightened its appeal to investors across the globe through reforms to render a more market-oriented and rule-based environment.

On Feb 17, the country rolled out its across-the-board registration-based IPO system with relevant rules coming into effect, according to the China Securities Regulatory Commission.

The reform builds on rules adopted by the Shanghai Stock Exchange's sci-tech innovation board or the STAR Market in 2019, the ChiNext board of the Shenzhen Stock Exchange in 2020 and the Beijing Stock Exchange in 2021 to shorten review periods and ease domestic listings.

Hailing the reform as a major milestone in the history of China's capital market, Wu said it is likely to enhance the market's inclusiveness, allowing tech startups easier access to the market.