The China Securities Regulatory Commission (CSRC) hopes that reforms of the capital market will help the Chinese financial system to better service the country’s real economy and drive “quality growth,” with an especially strong focus on bolstering the tech sector.
Jiang Yang (姜洋), vice-chair of CSRC, said that the regulator’s upcoming measures would focus upon the needs of the “high quality growth” of the economy as recently emphasised by China’s central government, according to a report from Securities Daily.
Jiang said these measures would include the maintenance of the stable operation of capital markets and creating a sound environment for high-quality growth, as well as deepening fundamental reforms of IPO’s, mergers and restructuring, dividends and market withdrawals, as well as vigorously increasing the quality of listed concerns.
One source said to Securities Daily that this renewed emphasis upon high-quality growth had manifested itself in three key areas when it came to the issuance of new shares, including the normalisation of new share issuance, a focus upon tech firms when it came to IPO’s, and strict increases to the quality of newly listed concerns.
Since the start of 2017 until the end of April this year China has seen 463 IPO’s that have raised a total of 265.2 billion yuan, with tech companies accounting for roughly 80% of newly listed companies.
Tech companies and companies from strategic emerging industries also account for a large share of the 51 companies that have completed IPO’s from the start of 2018 until 22 May, raising a total of 50.454 billion yuan.
The sources said that the listing of more tech companies and “unicorns” would change the structure of the A-share market, expediting structural optimisation of the market as well as high-quality growth.
Beijing has previously emphasised the need to expand direct financing, in order to reduce the economy’s dependence upon debt-fuelled growth as well as ensure that the financial system can better service the real economy.
To this end CSRC says that it will “continually accelerate the creation of a multi-tier capital market, effectively employ the multiple functions of capital markets, and provide vigorous support to innovative growth and an accelerated shift towards new economic drivers.”