According to a report by China Daily on March 19…
China is leveraging its capital markets to drive a new generation of hard-tech startups, with long-term funding mechanisms, national mergers and acquisitions (M&A) vehicles, and reforms to its Nasdaq-style growth board. These measures, outlined in the country’s 15th Five-Year Plan, aim to channel financial resources into emerging technologies over the next five years.
At the core of this strategy is the promotion of “patient capital”—investment vehicles with horizons of 15 to 20 years designed to match the long development cycles of frontier technologies such as quantum computing, nuclear fusion, and brain-computer interfaces. In Tianjin, two concept-verification funds were launched with 50 million yuan ($7.26 million) each to support ultra-early-stage university-born innovations. Similarly, Shanghai State-owned Capital Investment Co Ltd (SSCI) established a fund of funds targeting semiconductors, biomedicine, and AI, with underlying funds structured for long-term commitment.
To improve exit pathways and liquidity, China plans a national-level M&A fund expected to guide over 1 trillion yuan of investment. Experts note that many innovative firms evolve as strategic modules within broader supply chains rather than standalone giants, making M&A a critical mechanism for scaling innovation.
The reforms extend to public markets. The China Securities Regulatory Commission announced that the ChiNext board will introduce more targeted listing standards, pre-IPO fundraising options, and optimized pricing mechanisms to better support high-quality tech and entrepreneurial firms. The approach shifts focus from traditional P/E ratios to value discovery, attracting medium- and long-term capital toward emerging industries.
China’s five-year plan also emphasizes integrating bond market development with the technology sector and easing access for foreign investors to participate in equity and venture capital markets. Collectively, these initiatives signal a comprehensive effort to align financial markets with the nation’s strategic push for technology-driven growth.