The recent National People's Congress and the Chinese People's Political Consultative Conference have set a significant agenda for 2024, emphasizing the importance of constructing a modern industrial system while accelerating the development of new productive forcesThis dual focus serves as a pivotal initiative reflecting the government’s vision to enhance the real economy with robust financial services as a driving forceIn this framework, financial services are not merely about providing funding; rather, they embody a proactive role in resource allocation, innovation promotion, and efficiency enhancementThe 2024 Financial Street Forum Annual Meeting, with its array of expert guests, aims to explore the evolving trends of financial empowerment in developing these new productive forces and the necessary adjustments needed in financial service strategies to invigorate this development effectively.

An imperative for optimizing service strategies has emerged

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According to Liu Yong, Director of the Internet Finance Research Institute in Zhongguancun, the financial sector must keep pace with the digital economyThis involves innovating financial service models and increasing support for innovative technology companies, particularly small and medium-sized enterprises that focus on scientific and technological advancementsThrough these efforts, financial services can penetrate the entire industrial ecosystem, ensuring that each region identifies and develops financial innovations compatible with its economic characteristics.

China stands at a critical juncture in its transition to a new qualitative production paradigmAs noted by Xiao Qiyun, Vice President of Beijing Yuxin Technology Group, the financial system plays an essential role in this transition, where the driving force for the banking sector’s support for new productive forces is firmly rooted in technological innovation

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Financial institutions must prioritize enhancing the quality and efficiency of their service offerings in developing innovative IT solutionsOver the next three years, self-initiated innovation will remain central, encompassing comprehensive advancements, adaptations, and even complete restructuring, all geared toward achieving self-reliance and control.

Rapid advancements in digital technology have positioned digital finance as a vital force pushing for financial innovation and industrial upgradesLi Jizhen, Vice Dean of the School of Economics and Management at Tsinghua University, asserts that the financial sector must adapt to changing times by refining service strategies, combining innovative attitudes with pragmatic actions to empower new productive forces effectively.

Liu Xiaoshu, Chief Economist at Qingdao Bank, emphasizes that while banks are accelerating their digital transformation, an even more crucial transition involves the transformation of bank balance sheets and risk management

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Meeting the demands of new productive forces requires banks to align their services with the lightweight asset characteristics of technology enterprisesThis includes innovative collateral forms, such as intellectual propertyBanks face unique challenges in supporting startups and growing businesses, necessitating collaboration with private equity and venture capital firms while fostering a business environment conducive to banking expansion.

According to Zhang Wenwu, Vice Chairman and General Manager of CITIC Group, the future should underscore the continual improvement of intellectual property systems and collateral regulations, establishing comprehensive legal frameworks for intellectual property securitizationUnder the guidance of such laws, attention must be devoted to coordinating various market services effectively, including developing technology investment insurance markets to help financial institutions mitigate investment risk exposure

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Furthermore, banks should innovate financial products, optimize service models, and enhance the efficiency and coverage of technology finance supply.

In recent years, China has made significant strides in establishing a multidimensional and widely accessible technological financial model that encompasses various funding mechanisms, such as technology loans, stock markets, bond markets, and venture capital, progressively adapting to the financing needs of diverse innovative companiesEach sector—banking, securities, and insurance—plays a pivotal role in enabling industrial development, leveraging its inherent advantages to foster new productive forces.

The role of state-owned large banks as the 'mainstay' in servicing the real economy is crucial, focusing on empowering industrial development in key battlegroundsYin Jiuyong, Executive Director and Vice President of Bank of Communications, believes the emphasis should be on enhancing the financial institutions' core professional capabilities

This involves refining the ability to perceive industry trends, offering full-scale comprehensive services, improving digital operational abilities, and augmenting globalization skills.

Zhang Wenwu highlighted that CITIC Group regards technological finance as both a driving force and focal point for supporting technological innovationThe organization has built a "stock-loan-bond guarantee" service system, providing comprehensive financial services over the entire lifecycle for technology enterprisesAs of the end of September this year, CITIC Bank's technological financial loan balance reached 387.4 billion yuan, representing a 25.2% increase since the beginning of the year, servicing approximately 28,000 tech clients.

Insurance serves as a fundamental institutional arrangement within the modern market economy, offering empowerment through risk coverage and capital accumulation

Bu Fanwei, Deputy Director of the Property Insurance Regulatory Division of the National Financial Supervision Administration, asserted that China's insurance sector has demonstrated substantial progress in empowering high-quality industrial development, significantly aiding technology innovation, environmental industry upgrades, and the small-scale economyFrom January to August this year, the technological insurance premiums in China amassed 38.8 billion yuan, providing over 70 trillion yuan in risk protection for scientific research, results conversion, and application activities.

To further refine the technological financial service system, Zhang Wenwu proposed enhancing capital market support for innovative enterprises, fine-tuning the technological financial supply system, and optimally utilizing domestic and foreign technological financial resources.

The current stabilization and recovery of China's capital market has opened new avenues for financing valuable innovative enterprises

Zhang Wenwu posits that strengthening the multi-tiered capital market development and maximizing the functions of key platforms, such as the Science and Technology Innovation Board, the Growth Enterprise Market, and the Beijing Stock Exchange, is timelyFurthermore, optimizing incentives and assessments, streamlining the flow of funds into the market, and encouraging long-term patient capital can foster a more inclusive and adaptable market, facilitating the IPO processes for innovative enterprises.

In instances where traditional credit and fiscal measures fall short of supporting disruptive innovations within small and micro enterprises, the involvement of venture capital or private equity can effectively aid these companies in achieving technological transformationsThe capital market serves as an incubator for radical innovation, featuring a unique risk-distribution mechanism capable of mitigating the risks and costs associated with new technological developments

Additionally, through measures such as valuation pricing, talent incentives, and mergers and acquisitions, the capital market can galvanize innovative companies to amplify their research investments and promote upgrades across industries.

Stock exchanges are crucial in capital markets, providing direct financing services for various innovationsCharles Li, CEO of Hong Kong Exchanges and Clearing, revealed that numerous initiatives have been undertaken to advance innovation and the development of new productive forces, including reforms in listing systems and improvements in market liquidityThe introduction of new listing rules, such as the 18B and 18C, has created more accessible pathways for potentially groundbreaking innovative companiesThe Hong Kong stock exchange remains committed to expanding and optimizing its connectivity mechanisms and endorsing market reforms while nurturing product and service innovations to support the advancement of new productive forces.

Zhou Guihua, Chairman of the Beijing Stock Exchange, articulated that the exchange will amplify its support for technology innovation

This includes enhancing the adaptability of rules, accurately assessing and refining listing mechanisms, optimizing financing merger arrangements, and broadening the product tool framework, thereby supporting high-quality firms aligned with the direction of new productive forcesAdditionally, fostering an environment that encourages innovation and tolerates failure is paramount, as is the need for precision in services directed at enhancing the technological innovation capabilities of small and medium enterprises.

With the emphasis on nurturing new productive forces, financial institutions have begun adopting capital market tools to provide high-quality services to technology enterprisesZhang Wenwu announced that CITIC Group has collaborated its nearly twenty investment firms to create the CITIC Equity Investment Alliance, partnering with renowned external investment firms to develop an ecosystem focusing on early-stage, small, long-term, and hard technology investments