The recent plenary sessions of China's National People's Congress and the Chinese People's Political Consultative Conference placed a significant emphasis on advancing the construction of a modern industrial system and accelerating the development of a new type of productive force for the coming yearIn the transformative landscape of contemporary finance, it is increasingly recognized that financial services extend beyond merely providing capital; they play a pivotal role in resource allocation, fostering innovation, and enhancing operational efficiencyAs attendees gathered at the 2024 Financial Street Forum Annual Conference, the discussions underscored the vital role of finance in empowering the development of this new productive force, while exploring how financial strategies should be adjusted to infuse robust momentum into this growth.

The adaptation of financial service strategies is of paramount importance

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Liu Yong, the president of the Internet Finance Research Institute of Zhongguancun, emphasized that to achieve high-quality industrial development led by financial empowerment, it is essential to align with the pace of the digital economyThis involves continuously innovating financial service models and increasing support for technology-driven enterprises, particularly small to medium-sized firms that prioritize technological advancementsLiu suggests that financial institutions should deepen their engagement with the entire industrial ecosystem and tailor their services to the unique characteristics of the regional economic landscape.

China is at a crucial juncture in promoting high-quality development of new productive forcesAccording to Xiao Qiyun, vice president of Beijing Yuxin Technology Group Co., the financial system plays a critical role in this transitionHe noted that the key driver of new productive force lies in "technological innovation." Banks, while innovating their IT solutions, must focus on enhancing service quality and operational efficiency to effectively empower this new productive force

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Over the next three years, he predicts that self-driven innovation will remain central to the IT solutions offered by banks, requiring comprehensive upgrades and innovations.

As digital technologies continue to advance rapidly, digital finance has emerged as an essential driving force behind financial innovation and industrial upgradingLi Jizhen, vice dean of Tsinghua University's School of Economics and Management, remarked that the financial sector must adapt to the changing times by adjusting service strategiesThis adaptation requires a combination of innovative approaches and practical actions to effectively enable and drive the robust development of new productive forces.

Liu Xiaoshu, chief economist at Qingdao Bank, highlighted the necessity of transforming the banking sector's balance sheets and risk management practices to effectively support the advancement of new productive forces

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This requires banks to adapt to the characteristics of asset-light technology enterprises by innovating the forms of collateral, including intellectual propertyWhile challenges remain in supporting early-stage and growth-phase enterprises, banks should emulate investment banking practices in their lending strategies while also strengthening collaborations with private equity and venture capital firmsFurthermore, it is crucial to continually enhance the business environment that benefits banking operations.

Zhang Wenwu, vice chairman and general manager of CITIC Group, recommended enhancing the intellectual property system and the collateral system while improving the legal framework for the securitization of such rightsHe urged a focus on coordinated services in various market aspects, such as developing insurance markets for scientific research investments to help financial institutions reduce risk exposure

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Additionally, he suggested promoting pilot equity investment programs for financial asset management companies and innovating financial products and service models to improve efficiency and coverage for technology-driven financial services.

In recent years, China's financial ecosystem has been increasingly diverse, establishing comprehensive systems that encompass technology loans, stock markets, bond markets, and venture capitalThese financial channels have gradually adapted to the multifaceted financing needs of technology innovation enterprisesThe banking, securities, and insurance sectors are integral parts of this ecosystem, each bringing unique advantages to the table in supporting the development of new productive forces.

Majoring institutions, such as large state-owned banks, play a crucial role as the mainstay of support for the real economyYin Jiuyong, executive director and deputy president of the Bank of Communications, pointed out that the key focus should be on enhancing the financial capabilities of institutions to empower industry development

This involves strengthening the understanding of industry trends, providing comprehensive service capabilities, enhancing digital operational abilities, and increasing global operational reach.

Zhang Wenwu elaborated on CITIC Group's approach, stating that they prioritize supporting technological innovation and stimulating the growth of new productive forces through their "stock-loan-bond-insurance" integrated service frameworkThis model provides comprehensive financial services throughout the entire lifecycle of technology companiesBy the end of September this year, CITIC Bank's technology finance loan balance reached 387.4 billion yuan, reflecting a 25.2% increase since the year's start and serving approximately 28,000 tech clients.

In the modern market economy, insurance serves as a fundamental institutional arrangement that empowers through risk coverage and capital aggregation

Bu Fanwei, deputy director of the Property Insurance Supervisory Division at the National Financial Supervisory Administration, mentioned that China's insurance sector has seen notable achievements in supporting high-quality industrial development, actively backing technological innovation and green transformationsFrom January to August this year, the premiums for technology insurance reached 38.8 billion yuan, providing risk protection for technology activities exceeding 7 trillion yuan.

In the pursuit of continuously improving the technology finance service system, Zhang Wenwu proposed enhancing the capital market's support for financing technology innovation enterprises, optimizing the supply system for technology finance, and leveraging both domestic and foreign resources effectively.

As the stabilization and recovery of China's capital markets present new opportunities for technology-driven enterprises seeking to go public, Zhang Wenwu believes it is timely to accelerate the development of a multi-tiered capital market structure, especially by further capitalizing on specialized platforms such as the Sci-Tech Innovation Board and the Growth Enterprise Market.

At the same time, the role of capital markets in nurturing disruptive innovation cannot be overstated

When traditional sources of financing, such as bank loans and government funding, fall short in providing adequate support for disruptive small firms, venture capital can step in to help bridge the gap in technology conversionMoreover, capital markets foster a unique risk diversification mechanism, which can effectively mitigate the costs associated with new technology developmentThey achieve this by employing valuation strategies, talent incentives, and merging and acquisition processes to encourage these innovative firms to increase their research and development investments while pushing for industrial optimization and upgrading.

Exchanges serve as the backbone of capital markets, offering essential direct financing services for a variety of innovationsCharles Li, CEO of Hong Kong Exchanges and Clearing Limited, shared that in recent years, to stimulate the development of innovation and new productive forces, Hong Kong has worked tirelessly to reform its listing system and enhance market liquidity

New listing rules, such as provisions for companies under the18B and 18C categories, have been instituted, paving the way for more potential innovators to enter the public marketHong Kong will continue to optimize its connectivity mechanisms and engage in multiple market reforms, as well as innovate products and services to propel the development of new productive forces.

Zhou Guihua, chairman of the Beijing Stock Exchange, affirmed a stronger emphasis on supporting technological innovation in the futureThis includes enhancing institutional adaptability and assessing the issuance mechanisms relevant to the development of high-quality enterprises that represent the new type of productive forcesFurther, promoting an inclusive culture that tolerates failure and enhances support for small and medium-sized enterprises in technology innovation will be key to consolidating the resources and policies required to drive innovation initiatives.

In terms of cultivating new productive forces, financial institutions are actively leveraging capital markets to offer high-quality services to technology firms

Zhang Wenwu highlighted CITIC Group's approach, leveraging nearly 20 equity investment institutions to form the CITIC Equity Investment AllianceTogether with well-known external investment entities, they are building an ecosystem focused on targeted investments with a long-term horizon, emphasizing critical technology sectors, and comprehensively covering the investment spectrum from fundraising to liquidation.

The call for deeper collaboration between the Beijing Stock Exchange and Hong Kong's capital markets reflects a shared vision for constructing a leading international technology innovation hubZhang Wenwu recommended utilizing favorable policies for qualified foreign limited partners and easing cross-border financing, while streamlining regulations for domestic firms seeking to list overseasThis would enable technology companies to leverage the best of both worlds from these two vibrant marketplaces.