Financial empowerment technology has great potential

The recently held Central Financial Work Conference proposed to optimize the funding supply structure and allocate more financial resources to promote technological innovation, advanced manufacturing, green development, and small and medium-sized enterprises. The meeting emphasized five major articles on technology finance, green finance, inclusive finance, elderly care finance, and digital finance

The recently held Central Financial Work Conference proposed to optimize the funding supply structure and allocate more financial resources to promote technological innovation, advanced manufacturing, green development, and small and medium-sized enterprises. The meeting emphasized five major articles on technology finance, green finance, inclusive finance, elderly care finance, and digital finance.

Currently, China is at a critical juncture in the transformation of old and new kinetic energy. As a product of technological economy, technology finance is of great significance in improving the quality and efficiency of economic development and promoting a virtuous cycle of national economic development. On the one hand, technology finance can effectively improve the efficiency of matching the supply and demand of financial services through innovative arrangements of financial tools, systems, policies, and services, and promote the coordinated development of technology development, achievement transformation, and high-tech industries. On the other hand, technology finance focuses on the digital reform of financial institutions, accelerating the free circulation and optimized allocation of capital and other factors among industries, thereby achieving a virtuous cycle of "technology industry finance".

In recent years, China has made many beneficial attempts in policy systems, financial service models, and other aspects to comply with the new trend of technological and financial development. Local governments should improve their technology finance policies and support the development of technology enterprises through loan discounts, subsidies, and other means; Banks integrate emerging technological means with their own businesses, innovate credit product systems, and promote business process optimization; Venture capital institutions deeply participate in the development of technology-based enterprises by participating in government guided industrial funds and other means, forming a connection with multi-level capital markets.

However, objectively speaking, compared to mature markets, there is still a lot of room for optimization and improvement in the development of China's technology finance. In the future, further efforts should be made in product innovation, business process reshaping, and sound regulatory mechanisms to optimize the technology finance ecosystem and enhance the resource allocation efficiency of finance in the long-term capital formation process of technological innovation.

At the macro level, we need to strengthen policy support and guidance, leverage the advantages of China's institutional mechanisms under the conditions of a market economy, and concentrate our efforts to accomplish major tasks. Innovate the financial and tax system, create a better investment service environment, and attract more social funds into innovative activities such as basic research, applied research, and technology transformation. We will deepen and implement the reform of the financial system, encourage high-quality enterprises to go public for financing, and guide the standardized development of various financing models such as preferred stocks, convertible bonds, and supply chain finance by optimizing approval procedures and expanding listing standards. Promote the development of the venture capital market, create a good investment and financing ecosystem from the policy perspective, encourage and guide long-term funds to increase capital support for "early, small, and hard" technology enterprises, provide more relaxed policy support in policy preferences and exit channels, and further activate the vitality of the innovation market.

We should focus on improving the multi-level capital market system and improving the investment and financing functions of the capital market. Steadily advancing the comprehensive registration system reform, strengthening the connectivity of various sectors, taking into account different characteristics such as industry, market value, and financial indicators, to meet the financing needs of different business entities. Promote the transformation of investor structure, guide various types of pension, insurance funds, and bank wealth management funds to flow to high-quality technological innovation enterprises. Accelerate the construction of the transfer mechanism, smooth the financing channels after delisting, and open up diversified channels for financing of small and medium-sized enterprises.

Improve the construction of data governance infrastructure and enhance the integration of data elements with financial business. Improve the mechanisms for collecting, storing, processing, sharing, and ensuring digital security of digital elements, build new infrastructure, solve the problem of data silos, achieve interconnectivity, improve service procedures such as issuance, trading, and settlement, and expand service channels. Establish more in-depth and targeted models for credit evaluation, market pricing, and risk control of technological innovation enterprises, promote standardized data management, and implement classified customization and precise investment models based on this, promoting business reshaping and management model transformation.

At the meso level, financial institutions are increasing their efforts to "push back" and use the product side as a breakthrough to innovate and enrich the supply of technology finance. Improve the credit management mechanism, improve the financing guarantee and collateral management mechanism, and enrich bank credit products. Differentiate the design of credit, term, limit, and mode according to the development stage of the enterprise; Innovate bond financing tools, enrich bond financing products, accelerate the development of asset securitization, and focus on supporting technology innovation in bond financing for small and medium-sized enterprises; Support venture capital institutions to deeply participate in enterprise development and governance, provide high-quality enterprises with knowledge, talent, professional skills, etc., and improve the operational level of enterprises.

For regulatory agencies, regulatory capacity needs to be "restructured forward", and in response to the trend of complex technology finance risks and decentralized financial regulatory objectives, further exploration and improvement of technology finance regulatory mechanisms should be carried out. Connect with advanced regulatory standards, improve the financial risk prevention, early warning, disposal, and accountability system, and guide the free flow and value play of data elements. Improve the data security regulatory framework, improve internal compliance requirements, establish a technology regulatory big data platform, and establish a risk early warning and prevention mechanism. We will improve the credit sharing and co governance mechanism, improve financing guarantees, collateral management, and other mechanisms, guide financial institutions to increase their risk reserve ratio, simultaneously strengthen post event supervision and risk compensation, and improve risk supervision and prevention mechanisms.

(The author is the Vice Dean of the School of Finance at Wudaokou, Tsinghua University, and a Distinguished Professor of the "Changjiang Scholars" of the Ministry of Education)

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