context: Financing scitech innovation projects while the failure rate remains high is a challenge. The PRC is actively exploring alternative funding mechanisms, such as government guidance funds that combine public and private capital with the aim of generating profits while also advancing the government's strategic objectives. A plan for finance reform pilots to support scitech innovation designated Shanghai, Nanjing, Hangzhou, Hefei and Jiaxing as pilots in November 2022.
Following its designation as a pilot, Anhui province issued the ‘Hefei Science and Technology Innovation and Financial Reform Pilot Zone Construction Plan’ on 26 Apr 2023, reports People’s Daily. Hefei should become a leader in financial reform to support scitech, the plan says, by
- improving the system of scitech innovation financial institutions through
- establishment of a head office-level financial service centre and a head office-level innovation insurance centre by large financial institutions
- support for local high-quality banks transforming into tech-specialised banks
- standards for scitech innovation financial institutions, aiming to have them fully meet these standards by 2025
- optimising the evaluation criteria for innovative enterprises
- innovating stock and debt financing models
- cultivating a full-cycle ‘funding forest’
- exploring diversified investment mechanisms for basic research
- improving the infrastructure for scitech innovation finance, including
- an intelligent and intensive ‘Anhui financial brain’
- a nationwide intellectual property service platform integrating registration, evaluation, trading and financing in order to overcome insufficient credit information sharing
- deepening regional cooperation
- effectively preventing financial risks in scitech innovation.
According to People’s Daily, the plan targets having
- 100 specialised scitech innovation institutions
- a balance of C¥1 trillion for scitech loans
- 100 scitech companies listed on the stock exchange.