Shang Fulin, the former regulator of mainland China’s banking and securities sectors, has urged relevant authorities to loosen their grip on equity financing to bolster technological innovation.
The role of China’s stock market must be played up to help investors and entrepreneurs better assess company valuations, mitigate risks and boost transactions, he told the Bund Summit financial forum in Shanghai on Friday.
“China’s financial system has a structural problem as companies still largely rely on bank loans for financing rather than the capital market,” Shang said. “Capital market, as a financing platform, fares better than banks in supporting start-ups and promising technology firms during high-growth periods.”
A total of 59 companies raised 42.2 billion yuan (US$6 billion) via IPOs on the Shanghai, Shenzhen and Beijing stock exchanges in the first eight months of 2024, compared with 304 billion yuan from 184 issuers a year ago, according to data from the Shenzhen Economic Daily.
