Focusing on five key tasks: "15th Five-Year Plan" to strengthen support for technological innovation in the capital market

The new round of technological revolution is rapidly evolving, profoundly changing industrial forms and economic development models. The “14th Five-Year Plan” outlines important deployments around “developing new quality productivity,” detailing five key tasks for capital markets to support technological innovation in the chapter on “strengthening the leading role of enterprises in technological innovation.”

Industry insiders believe that based on the new development stage of the “14th Five-Year Plan,” capital markets will further enhance their resource allocation function, build a financial system for technology that is compatible with technological innovation, improve policies for long-term capital investment in early-stage, small-scale, long-term, and hard technology, and drive China’s economy from “quantitative growth” to “qualitative leap.”

Constructing a Financial System for Technology Compatible with Technological Innovation

During the “14th Five-Year Plan” period, China has achieved fruitful results in technological innovation, with the intensity of R&D investment across society reaching 2.8%, overcoming a number of major core technologies, and achieving several significant original technological results.

To achieve the major goal of “significantly improving the level of technological self-reliance and strength,” the “15th Five-Year Plan” places “accelerating high-level technological self-reliance and leading the development of new quality productivity” in an important position, with a foundation in the real economy and led by technological innovation, accelerating the construction of a modern industrial system.

“New quality productivity is becoming a strong driving and supporting force for the high-quality development of China’s economy.” Zhang Jun, chief economist of China Galaxy Securities, stated in an interview with the Shanghai Securities Journal that the core of developing new quality productivity is to emphasize technological innovation, and the financing model that is more compatible with technological innovation is direct financing, which urgently requires capital markets to play a more important role.

Compared to the “14th Five-Year Plan,” the “15th Five-Year Plan” has expanded the requirements for capital market reform, further enhancing the ability of capital markets to serve technological innovation through five task deployments. Specific tasks include:

—— Supporting quality technology enterprises in listing and financing, issuing bonds;

—— High-quality construction of the bond market “technology board”;

—— Vigorously developing venture capital and broadening the sources of medium- and long-term venture capital funding through multiple channels;

—— Leveraging the role of the National Venture Capital Guidance Fund, the National M&A Fund, and the China Securities Journal to support innovation;

—— Improving the convenience for foreign capital to engage in equity investment and venture capital in China.

Yang Shujuan, partner and head of the government and infrastructure market at Ernst & Young Greater China, stated in an interview with the Shanghai Securities Journal that the “15th Five-Year Plan” enhances the functional positioning of capital markets—capital markets are transitioning from a “resource allocation platform” to a “core hub supporting the modern industrial system”: continuously improving institutional inclusiveness for hard technology enterprises characterized by “high R&D and long cycle,” and further smoothing the mechanisms for issuance and listing, refinancing, mergers and acquisitions, and delisting, supporting technology enterprises in achieving technological iteration through industrial integration.

Coordinated Efforts Between Stocks and Bonds, Accelerating the Construction of a Diversified Financing System

The policy focus of China’s technology financial system is shifting from single equity financing to dual-driven by stocks and bonds, with a multi-level, relay-style financing ecology accelerating into shape.

Compared to the “14th Five-Year Plan,” which proposed “smoothing the domestic listing and financing channels for technology enterprises,” the “15th Five-Year Plan” explicitly states support for quality technology enterprises in listing and financing, issuing bonds. The former is based on smoothing a single channel for equity financing, focusing on broadening the listing paths for technology enterprises; the latter emphasizes the coordinated interaction between stocks and bonds, building a financing ecology that covers the entire life cycle of technology enterprises.

The core logic of the upgraded policy statement stems from the inherent characteristics of technology innovation, which involves large investments, long cycles, and high risks, making it difficult to meet the funding needs of innovation enterprises throughout their life cycle through pure equity financing. Technology innovation bonds, as an important link connecting capital markets and technological innovation, can provide more efficient, convenient, and low-cost incremental funding for the innovation field.

Enhancing the synergy between stocks and bonds also embodies the inherent logic of institutional optimization. Zeng Gang, director of the Shanghai Financial and Development Laboratory, stated in an interview with the Shanghai Securities Journal that the two complement each other, helping to avoid the dual risks of excessive reliance on equity financing that leads to rapid equity dilution or excessive reliance on debt financing that results in uncontrolled financial leverage.

The “14th Five-Year Plan” proposes improving the market-oriented bond issuance mechanism, steadily expanding the scale of the bond market, enriching the variety of bonds, and issuing long-term government bonds and long-term infrastructure bonds. On this basis, the “15th Five-Year Plan” clearly states to construct the bond market “technology board” in a high-quality manner.

The inclusion of the bond market “technology board” in the national five-year plan for the first time marks the elevation of phased policies to a national strategy, further deepening the logic of functional stratification in the bond market.

“In the past, the expansion of the bond market focused more on total growth at the macro level, while the bond market ‘technology board’ aims to create a dedicated issuance channel and institutional arrangement for technology enterprises, addressing pain points such as high issuance thresholds and difficulty in investor recognition, promoting financial resources to be allocated more efficiently and precisely to the field of technological innovation, guiding funds towards hard technology and key core technology breakthroughs,” stated Ming Ming, chief economist of CITIC Securities, in an interview with the Shanghai Securities Journal.

Interviewees predict that subsequent policies may coordinate efforts from the aspects of standards, products, and mechanisms. Ming Ming suggests: in terms of standards, it is necessary to establish issuance and review standards that adapt to the characteristics of innovation enterprises; at the product level, mixed types such as innovative convertible bonds, technology innovation notes, and asset securitization should be encouraged; and simultaneously, risk-sharing and credit enhancement mechanisms should be further improved.

Cross-market policy coordination is eagerly anticipated by the market. “The 2025 introduction of the bond market ‘technology board’ by the People’s Bank of China and the China Securities Regulatory Commission is already a precedent for coordination.” Zeng Gang analyzed that in the future, policy coordination may extend to more dimensions: the central bank may provide liquidity support for innovation bonds through relending tools, reducing holding costs, forming a dual incentive of “monetary policy tools + capital market access”; the China Securities Regulatory Commission may facilitate the linkage between innovation bonds and venture capital funds, encouraging equity investment institutions to raise funds through the bond market “technology board” and precisely invest in early-stage hard technology enterprises, achieving efficient transmission of “bond funds—equity investment.”

Better Leveraging Venture Capital’s Role in Supporting Technological Innovation

Venture capital is an important force in supporting technological innovation, especially during the startup and growth phases of innovation enterprises, as it can provide continuous funding support and specialized services, accompanying enterprises through critical stages of research and development.

Authoritative data shows: as of the third quarter of 2025, the number and proportion of venture capital funds directed towards small and medium-sized enterprises are 74.05% and 54.94%, respectively; the number and proportion directed towards high-tech enterprises are 49.94% and 53.96%, respectively; and the number and proportion directed towards early-stage technology enterprises are 32.34% and 20.78%, respectively.

First, further expand the depth and breadth of venture capital’s functions. Compared to the “14th Five-Year Plan,” which proposed “encouraging the development of angel investment and venture capital,” the “15th Five-Year Plan” emphasizes “vigorously developing venture capital and broadening sources of medium- and long-term venture capital funding through multiple channels,” highlighting the critical role of venture capital in supporting technological innovation in the next five years, while raising higher requirements for broadening sources of equity venture capital funding in the market.

Second, better leverage the leading role of the “national team.” “Leveraging the role of the National Venture Capital Guidance Fund and the National M&A Fund” has been incorporated into the “15th Five-Year Plan.” Currently, the National Venture Capital Guidance Fund has begun operations, benefiting many startup enterprises across various fields; the National M&A Fund will be established this year, further smoothing the exit channels for venture capital and improving the turnover efficiency of venture capital, guiding various funds to leverage an estimated scale of over 1 trillion yuan.

Finally, encourage foreign capital to support China’s technological innovation development. The “15th Five-Year Plan” also deploys “improving the convenience for foreign capital to engage in equity investment and venture capital in China,” aiming to attract more quality foreign capital into the primary market to further participate in China’s technological innovation and emerging industries. Recently, Wu Qing, chairman of the China Securities Regulatory Commission, publicly stated that the next step for the CSRC will be to focus on creating a first-class market-oriented, law-based, and international business environment, aiming to enhance the convenience of cross-border investment and financing, further pushing for a new level of bilateral openness in markets, products, services, and institutions.