The Beijing News:

Since the 18th CPC National Congress, the capital market has launched a series of measures in implementing the innovation-driven development strategy and supporting scientific and technological innovation, which has achieved positive results. For example, since its establishment three years ago, the STAR Market has supported over 400 sci-tech companies in getting listed. Can you give us a detailed introduction?

Li Chao:

Thanks for your question. The capital market has special advantages in supporting scientific and technological innovation. Apart from establishing the STAR Market, we have worked on giving full play to the special function of the capital market in providing full support for scientific and technological innovation, which has achieved notable success. For example, during the trial for the registration-based IPO system, we made some institutional arrangements and reforms regarding the STAR Market and the ChiNext stock market. The establishment of the Beijing Stock Exchange is also a very important step in supporting innovative small and medium enterprises. And we also made some institutional arrangements for the reasonable operation of a delisting system for venture capital and private equity. The bond market has developed new types of bonds for innovation and business startups and scientific and technological innovation, giving strong support to sci-tech companies. As for the stock market, we have set diversified and inclusive issuance and listing qualifications to allow sci-tech companies that meet the requirements, such as pre-revenue sci-tech companies and sci-tech companies of special shareholding structure, to get listed. And we have implemented a more flexible equity-based incentive mechanism. All of these measures have played a significant role in promoting the development of sci-tech companies. 

In the meantime, their financing capability has been continuously improved. In the past two years, the number of IPO companies on the STAR Market and the ChiNext stock market accounted for over 70% of the domestic market over the same period. And private equity funds have invested a total of over 10 trillion yuan in unlisted companies, with the investment into the field of scientific and technological innovation taking up a considerable proportion. The support of the capital market for scientific and technological innovation comes from not only the financing but also incentive mechanisms. The capital market has provided unique, diversified, and effective incentive mechanisms for sci-tech companies. Demonstration and agglomeration effects have gradually come into being. A group of technologically advanced and market-recognized sci-tech companies has successively entered the capital market, with sectors such as integrated circuits and biomedicine much preferring the STAR Market.

Based on the sci-tech companies listed on the STAR Market in recent years, technology breakthroughs and independent innovation have been speeding up. In 2021, the ratios of the R&D expenditure to operating revenues of the companies listed on the STAR Market and the ChiNext stock market were 9.6% and 4.6%, respectively, much higher than other boards and unlisted companies, which has played a positive role in creating a favorable atmosphere for scientific and technological innovation throughout society.

Thank you.