In the midst of a new wave of technological innovation and the rise of the digital economy, technology enterprises are emerging as vital engines for global economic transformation and industrial upgradeTheir innovative business models and rapid growth are reshaping the landscape of the global marketThese companies, characterized by light assets, high risks, and potentially high returns, have instigated a paradigm shift in financial markets, demanding long-term, sustained, and stable capital to support research and development, as well as market expansion.

In recent years, China has rolled out a variety of supportive policies across multiple sectors including credit, insurance, financing guarantees, bonds, venture capital, and capital marketsThese initiatives have markedly increased the flexibility and innovation capacity of financial markets to adapt to the new economic modelsIn the realm of indirect financing, dominated by banks, the central bank has set up structural monetary policy tools like the technology innovation relending, effectively guiding financial institutions to increase credit lending to technology enterprises

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Local banks have responded proactively, leveraging innovative approaches such as pledges based on intellectual property and accounts receivable to launch diversified credit products like innovation loans and talent loans, catering to the financing needs of technology companies at various stages of their development.

As direct financing channels have become increasingly robust, a comprehensive ecosystem for technology financial services is taking shape, providing integrated support across the entire lifecycle of technology enterprisesThis encompasses various financing avenues including venture capital, stocks, and bonds, accelerating the formation of diverse technology financial service systemsThe continuous enhancement of regional equity markets, coupled with the catalytic role of government-guided industrial funds, is offering an increasingly ample financial backing for technology innovation and strategic emerging industries.

Under the dual support of indirect and direct financing, the past five years have seen a remarkable increase in the financing amounts for small and medium-sized technology enterprises in China

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The total loan balance and the mid-to-long term loan balance for these companies have both surpassed the 2.5 trillion yuan markAdditionally, the loan approval rate has surged from 14% to a remarkable 47%. Moreover, government-guided funds have seen strategic emerging industry funds account for 50% of their total scaleThese rising statistics reflect an improving financing environment for technology enterprises and underscore the robust backing of the Chinese financial system for innovation-driven development strategies, thereby injecting new vitality into high-quality economic growth.

However, to accelerate the formation of a new quality production force, it is essential to ensure sufficient capital resources for R&D investment, which serves as the foundation for enterprise innovationCurrently, the capital supply for China's technology start-ups still faces numerous challengesThe primary bottlenecks include a reliance on indirect financing, resulting in higher costs for bank loans, and a lack of inclusivity in the direct financing market

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This is characterized by limited bond financing scales, a relatively small venture capital market size, and low risk tolerance, leading to difficulties in fundraising and exitsMoving forward, it is crucial to optimize the balance between direct and indirect financing and continuously enrich the types and channels of financial services available.

Innovation in China's indirect financing system is paramount, with a focus on diversifying the bank credit product matrixThis could involve designing differentiated credit models that align with business development trajectories, enhancing credit guarantees, and increasing credit availability for technology enterprises while reducing financing costsSupport for a technology innovation project library and the establishment of robust credit management mechanisms, along with improved financing guarantee and collateral management, are essential steps

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Banks should be encouraged to innovate their credit products, such as science and innovation loans and R&D loansAdditionally, clear standards for investment-lending operations should be established, promoting the linking and popularization of these practices while urging bank wealth management subsidiaries to develop long-term equity products, fostering a deeper integration of technology and finance.

Furthermore, there is an urgent need to cultivate a vibrant and active venture capital market with greater capital inclusivityStrengthening government-guided fund support, optimizing evaluation criteria, and enhancing the inclusivity of technology projects will be vitalEstablishing a shared platform for government funds and industrial capital investment projects can facilitate collaboration between the government and industryAdditionally, the design of investment and fundraising management systems for venture capital must be refined to differentiate regulatory practices for various investment institutions, while formulating short, medium, and long-term funding plans

Tax benefits should be increased to incentivize investments in early-stage, small-scale, long-term, and hard technology industries.

Efforts to promote innovation in technology bonds must be enhancedThis includes appropriately easing the strict assessments pertaining to technology bonds as interest-bearing liabilities and excessive requirements regarding R&D costs, management expenses, revenue, and market sharesEstablishing a comprehensive credit evaluation system for technology enterprises will facilitate standardization within the bond market and encourage equal market standing for enterprises of various ownership structuresEncouragement for experimental technological bond products on the sci-tech innovation board, along with the relaxation of conditions for issuing REITs targeted at technology, can help lower costs for issuingFurthermore, it is critical to improve transparency through rigorous disclosure of information and ongoing supervision, especially regarding the flow of funds and business operations of enterprises, thereby promoting the trading of quality technology bonds.

Lastly, enhancing the technology capital ecosystem and fostering patient capital are essential