Enhance Institutional Inclusiveness and Adaptability; Capital Markets Support Technological Innovation

The “14th Five-Year Plan” clearly states the need to enhance the inclusiveness and adaptability of the capital market system. This statement outlines a clear roadmap for the reform and development of the capital market over the next five years.

In the near term, the China Securities Regulatory Commission (CSRC) has clarified plans to deepen the GEM (Growth Enterprise Market) reform and optimize refinancing mechanisms. In the long term, a series of measures—including high-quality development of the bond market’s “Science and Technology Board,” deepening market-oriented reforms of mergers and acquisitions, and promoting the effective functioning of a multi-level capital market system—will help the capital market serve industrial transformation and high-quality development with new “accelerations.”

Targeted Support for the “New Economy”

Enhancing the inclusiveness and adaptability of the capital market system is of great practical significance in helping tech companies pursue “quality” in the “new” economy.

As Wu Qing, Chairman of the CSRC, has stated, in recent years, a new round of technological revolution and industrial transformation has accelerated, with major global capital markets actively reforming to adapt to innovation trends. From China’s perspective, whether it is cultivating and expanding emerging industries, proactively planning for future industries, or innovating and green- and intelligent-transforming traditional industries, further leveraging the functions of the capital market is necessary to accelerate the integration of technological and industrial innovation.

However, the current profit-oriented listing standards are no longer sufficient to fully cover the growth paths of new economy enterprises. Industry insiders analyze that, currently, high-quality enterprises in new industries, new business models, new technologies, as well as in new consumption and modern service sectors, are growing rapidly. Their business models, profit rhythms, and asset characteristics differ significantly from traditional manufacturing. Therefore, it is necessary to introduce more precise and inclusive listing standards to expand system coverage, enhance direct financing services, and continuously promote inclusive reforms that focus on targeted support for the “new economy.”

Additionally, some reforms at the tool level are urgently needed. For example, the current A-share refinancing system still has room for optimization in terms of financing efficiency, issuance pricing, and participation of medium- and long-term funds. As companies expand, acquire, and invest in R&D, there is a clear rising demand for more flexible and market-oriented financing tools.

Yao Pei, Chief Strategy Analyst at Huachuang Securities, states that the “14th Five-Year Plan” aims to significantly improve the level of technological independence and self-reliance, and directly addresses the long-term issues of system inclusiveness and adaptability in the capital market, laying a solid foundation for resource aggregation into new productive forces. It is foreseeable that supportive reforms for technological innovation in the capital market will continue to advance.

Accelerating the Formation of Innovative Capital

Looking ahead, the initial steps for reform have already been deployed in the first year of the “14th Five-Year Plan.” Focusing on serving new productive forces, the CSRC recently proposed two specific measures: releasing and implementing a plan to deepen GEM reform and accelerating the optimization of refinancing mechanisms.

Deepening GEM reform is an incremental policy to improve the functional positioning of the capital market segments. Many market participants believe that the core of the reform is to adapt to China’s support for technological innovation and future industrial development needs.

Tao Shengyu, Non-Banking Chief Analyst at Donghai Securities, considers that deepening GEM reform is a top priority for the 2026 capital market, with key focuses on “highlighting positioning, copying successful experience, and full-chain regulation.” This includes establishing more inclusive listing standards, weakening traditional profit constraints, covering high-growth enterprises in new consumption and modern services sectors, and solving the “listing difficulty” for innovative quality enterprises. It also involves replicating the mature experience of the STAR Market, introducing pre-IPO review mechanisms and policies for existing shareholders’ capital increases, significantly shortening review cycles, and alleviating early-stage funding pressures. These measures will promote the transformation of GEM from solely supporting hard tech to broadly serving the economy, forming a complementary relationship with the STAR Market and accelerating the formation of innovative capital.

Reform of refinancing also plays a vital role. Key measures such as “optimizing strategic investor recognition standards,” “launching shelf issuance,” and “improving lock-in price increase mechanisms” are crucial.

Xu Chi, Chief Strategy Analyst at Zhongtai Securities Research Institute, analyzes that shelf issuance and simplified procedures are expected to improve financing efficiency, benefiting listed companies with ongoing financing, M&A, and industry chain expansion needs. Improving lock-in price increase mechanisms and aligning issuance prices with market prices can help reduce excessive discounts, minimize dilution of secondary market shareholders’ interests, and better balance the relationships between issuers and investors. Optimizing strategic investor recognition and encouraging participation from social insurance funds and other medium- and long-term capital sources can shift refinancing funds from short-term arbitrage to long-term allocations, enhancing market pricing quality and the “long-term investment” nature of the capital market.

Establishing the “Technology Narrative” Logic for A-shares

In the short term, reforms are imminent, but long-term institutional development requires a holistic and systematic approach. From a medium- to long-term perspective, establishing an “technology narrative” for A-shares involves clarifying the boundaries of market segments, deepening market-oriented reforms of IPOs and M&A, and fostering a more inclusive market ecosystem to support the full lifecycle and comprehensive growth of tech enterprises.

In terms of equity financing, the multi-level capital market system needs continuous improvement.

“To seize the opportunities of differentiated development, we must enhance system inclusiveness and adaptability,” suggests Tian Xuan, a distinguished professor at Peking University. He recommends further clarifying the boundaries of the STAR Market, ChiNext, and Beijing Stock Exchange, continuously optimizing listing standards for tech and innovative SMEs, simplifying review processes, and improving listing efficiency to provide targeted financing channels for different types of enterprises. Accelerating the connectivity of multi-level markets, improving transfer mechanisms, and supporting companies to choose their preferred segments based on development stages will facilitate a gradient growth from startup to maturity.

Tian Xuan also emphasizes the need to deepen market-oriented reforms of IPOs and M&A, promote market-based IPO pricing, and tilt M&A toward key industries of new productive forces. Establishing special funds to reduce M&A costs and accelerate industrial integration and upgrading are also crucial. Achieving efficient investment and financing functions through “high-efficiency access + market-oriented integration” will facilitate direct financing channels, optimize resource allocation, and strengthen the capital market’s role in nurturing new productive forces.

Enhancing system inclusiveness and adaptability should not rely solely on equity markets but also promote the effective functioning of bond, futures, and options markets.

The bond market’s “Science and Technology Board” is expected to see further development. Galaxy Securities believes that the “14th Five-Year Plan” details the path for deep integration of technological and industrial innovation, and the issuance of sci-tech innovation bonds by tech companies will inject new vitality into the bond market.

“Regarding futures, derivatives, and asset securitization, continuous improvement of relevant laws, regulations, and regulatory systems is necessary. Expanding product varieties to meet investors’ diverse risk management and investment needs will enhance financial services for the real economy and risk management, providing full-cycle financial support for technological innovation,” says Li Qiusuo, Chief Strategist at CICC Research.