A 500 billion yuan re-lending initiative to serve technology innovation and transformation was set up in mid-June, of which 100 billion yuan will be used to support tech startups and SMEs. — China Daily
SHANGHAI: As high-grade productive forces will serve as a major economic driver for China during its ongoing efforts to deepen economic transformation, more policies supporting technology companies, especially small and medium enterprises (SMEs), can be expected after the third plenary session of the 20th Central Committee of the Communist Party of China, say experts.
They made the prediction after smaller-cap technology companies showed strong growth as of Tuesday.
While the benchmark Shanghai Composite Index rose slightly on Tuesday, ChiNext in Shenzhen, where technology-focused companies are traded, climbed 1.39%.
ChiNext-listed machinery equipment maker Nanjing Railway New Technology and electronic equipment company Sunwoda Electronic saw their respective share prices surge to the daily limit of 20% on both Monday and Tuesday.
Solar energy equipment provider Suzhou Maxwell Technologies and lithium battery company EVE Energy, two well-known ChiNext companies, saw their prices rise 5.44% and 3%, respectively, on Tuesday.
The Beijing Stock Exchange, home to shares of many technologically advanced small and medium-sized companies, also saw robust trading on Tuesday. Only four out of the 249 BSE-listed companies reported a loss on Tuesday, lifting the BSE 50 Index by 2.68%.
Xiu Qiang, joint chief strategist of Citic Securities, explained that the A-share technology sector has seen a business turnaround since mid-2023.
The profitability of electronic companies has been especially noticeable over the past two quarters.
The bullish performance of these technology companies will be further consolidated by clearer plans for the development of improved productive forces after the ongoing third plenum, he said. More supportive policies may be introduced for the economy, the digital economy and biomedicine after the meeting, he said.
Ying Ying, chief computer industry analyst at China Securities, anticipates more support to technology-focused SMEs, given a number of stimulus measures to further facilitate technological innovation have been introduced over the past few months.
The third phase of the China Integrated Circuit Industry Investment Fund was launched on May 24, with registered capital of 344 billion yuan, increasing on the size of the previous two phases. A 500 billion yuan re-lending initiative to serve technology innovation and transformation was set up in mid-June, of which 100 billion yuan will be used to support tech startups and SMEs.
The State Council, China’s Cabinet, released a set of measures on June 15 to facilitate the high-quality development of venture capital firms.
Four days later, the China Securities Regulatory Commission, the country’s top securities watchdog, issued eight new measures to deepen the reform at the STAR Market of the Shanghai bourse. — China Daily/ANN
