At the 2023 Tsinghua PBCSF Global Finance Forum, Plenary Session II “Capital Markets Empowering Real Economy Development" was held on May 20th. The experts, investors, and representatives of enterprises from scientific and technological innovation frontier joined together and shared their views and concerns, and made suggestions on improving the function of the capital market and building a better environment for science and technology innovation finance. The conference was presided over by Tian Xuan, the associate dean and chair professor of Finance at PBCSF Tsinghua University.

Xuan Tian

China’s Valuation System is an Incremental Contribution to the Existing Valuation System

In the keynote speech, Wu Xiaoqiu, Vice Chairman of Academic Committee, and Dean of China Capital Market Research Institute, Renmin University of China, put forward his views on the connotation, extension, and construction of the valuation system in China. Wu pointed out that the 33 years of development of China's capital market have experienced many twists and turns in the process. Despite the fact that China's financial culture, law, social foundation, and unique system have made China's capital market show some unique characteristics, the Chinese capital market and the international capital market share more common features. Based on this, he put forward suggestions for the further reform of China's capital market. He said that China's capital market needs to focus on fairness, openness, and justice to build high-quality capacity to serve the real economy. "Among them, marketization is an important basis for China's capital market to join the global community. Because marketization is mainly to solve the asset attribute, which has enough transparency, and lay a good foundation for globalization." Wu said in his speech.

Wu also put forward his opinions on building a valuation system with Chinese characteristics. He suggested to take the market economy as the premise, respect science as the principle, and fully respect the achievements of human civilization. Wu mentioned that people should pay attention to the Chinese factor in the valuation system, as well as the institutional and cultural influence that to be rationally valued and studied from the academic perspective.

Xiaoqiu Wu

Establish a Mature Capital Market, Promote Marketization and National Development

After over 30 years of development, China's capital market has made great progress in marketization, legislation, and internationalization. China's capital market is maturing and playing an important role in promoting high-level circulation and high-quality economic development.

In this regard, Xu Ming, the professor and doctoral supervisor of School of International Finance Law, China University of Political Science and Law, pointed out in his speech that the indicators of capital market’s maturity fall in several dimensions: basic functions and market infrastructure; level of marketization, legalization, internationalization, integrity, and investor protection, as well as the market supervision capability. At the time, China's multi-level capital market has been established, some core problems restricting the maturity of the capital market is being solved, the marketization mechanism of the mature capital market is under establishment, and there is also a legal supervision system. So preliminarily, this lays the basic foundation for a mature capital market.

Ming Xu

Xu believes China’s capital market is gradually developing into a mature stage, and proposed his thinking on one goal and five key directions. The goal is to build a standardized, transparent, open, dynamic, resilient, and mature capital market with Chinese characteristics. The five key directions include: to further promote the marketization of China's capital market; to further serve the national strategy and to promote high-quality development of the real economy; to further strengthen legislation and improve investor protection; to further opening up to the outside world and promoting the internationalization of the capital market; to reform and innovate to prevent financial risks in the capital market.

Hard Science and Technology Innovation Needs Strong Support from Capital Market

Zhuang Dan, the executive director and president of Yangtze Optical Fibre and Cable Joint Stock Limited Company (hereinafter referred to as "YOFC "), an enterprise at innovation frontier, shared YOFC's exploration of scientific and technological innovation and his understanding of how the a efficient capital market could empower the development of technology innovation.

Dan Zhuang

Zhuang said that the important basis of YOFC's development is to emphasize on: 1. research and development of core technology; 2. the investment in core technology; 3. the international market; 4. the diversified business development; 5. the knowledge and intelligence, and the digital transformation in enterprises, all of which are closely related to the capital market. The prominent role of the capital market in enabling entity enterprises is mainly reflected in the solution of several core problems that restrict the development of enterprises in science and technology innovation, including governance structure, R&D investment in technological innovation, sustainable capital sources in the continuous development, and the sharing, co-construction and win-win of upstream and downstream partners of the industrial chain.

Hi-tech Enterprises Are Becoming the Backbone of China's Capital Market

As a catalyst for innovation and an important engine for promoting scientific and technological development, venture capital has become a key force in the construction of a new pattern of innovation-driven development in China. Especially under the background of building a double circulation pattern, venture capital has become a strong support for an important factor resource flow.

From the perspective of the venture capital industry, Sheng Xitai, founding partner and chairman of HONGTAI APLUS, said that China's capital market has experienced over 30 years of development and reaches the level where over 100 years for other economies. Now, hi-tech enterprises are becoming the backbone of A-shares in this era. With the reform of the registration system, the number of A-share listed companies has soared, and the “specialized and innovative” enterprises are becoming the main force of A-share, which also brings new opportunities to investment institutions.

Xitai Sheng

“More than 80 percent of the specialized enterprises are distributed in the second -, third - even fourth-tier cities and the distribution is very balanced, with Beijing, Shanghai, and Shenzhen combined less than 20 percent. It is a very important change. Among listed companies, the small and medium-sized board of SZSE, and the “STAR Market” accounts for a large proportion of these enterprises.” Sheng said. So far, the proportion of specialized enterprises in A-share stocks and the proportion of venture capital participation still need to be improved, which also means that there is still a large step to go for venture capital to support the development of the specialized enterprises.