Do a good job of technology and finance’s great article and accelerate the realization of self-reliance and self-improvement in science and technology
[Doing Five Great Articles to Promote High-quality Financial Development]
Author: Dong Zhi (Vice President of Peking University, Dean of School of Economics)
The Central Financial Work Conference held a few days ago put forward that "finance should provide high-quality services for economic and social development" and "do five major articles on technology and finance, green finance, inclusive finance, pension finance and digital finance", which pointed out the direction for China’s financial services to the real economy. As the first of the "Five Great Articles", doing a good job in technology and finance’s great article not only shows that the Party and the country attach great importance to scientific and technological innovation, but also shows that science and technology, as the primary productive force, plays an important role in economic and social development, and it also shows that technology and finance plays an important role in promoting high-level scientific and technological self-reliance.
1 fully understand the significance of doing a good job in technology and finance’s great articles.
Technology and finance refers to a series of financial activities of scientific and technological innovation in financial services and the development of scientific and technological enterprises. It is the product of deep integration of scientific and technological innovation and financial innovation, involving financial system, financial policy, financial model, financial products and other aspects. Doing a good job in technology and finance’s great article is an inherent requirement for China to enter a new stage of development, implement new development concepts, and build a new development pattern. It is also the need for finance to achieve high-quality development and achieve the goal of becoming a financial power.
Lay a solid foundation for realizing a strong country through science and technology. Innovation is the first driving force to lead development, and finance is the blood of the development of the real economy. On the one hand, technology and finance has expanded the financing channels of scientific and technological innovative enterprises, reduced the risk of financial exclusion of scientific and technological innovative enterprises, and effectively improved their scientific and technological innovation capabilities. Flexible and diversified financing methods are particularly obvious in supporting long-term and difficult scientific and technological innovation; On the other hand, technology and finance can provide innovative financing incentives for enterprises, cultivate their innovative consciousness in the field of actual production and service, promote the transformation of old and new kinetic energy, optimize the structure of the real economy and improve the overall economic benefits.
Inject strong impetus into building a financial power. The development of technology and finance can promote the formation of the innovation ecosystem of the real economy and the financial industry at the same time, which not only provides a more favorable environment for scientific and technological innovation, but also provides a platform for orderly competition in the financial industry. Through diversified financing methods, technology and finance provides full-chain, full-life financial services for science and technology enterprises, which not only promotes scientific and technological enterprises to carry out R&D innovation activities and transform scientific and technological achievements, but also reduces the tendency of funds to be divorced from reality. In addition, the development of technology and finance has also built a platform for financial institutions to achieve innovative competitive development. Excellent technology and finance institutions should be able to quickly and effectively identify science and technology-based enterprises with technology transformation capability and market potential, and also provide multi-level services in finance, operation, R&D and even industrial chain integration.
Provide a strong guarantee for independent development. At present, the world’s great changes in the past century have accelerated its evolution, a new round of scientific and technological revolution and industrial transformation has developed in depth, and the international power has been profoundly adjusted. Major countries have regarded scientific and technological innovation as the main battlefield of the international strategic game, and the competition around the commanding heights of scientific and technological innovation has been unprecedentedly fierce. China’s development has also entered a period in which strategic opportunities and risk challenges coexist and uncertain and unpredictable factors increase. The sound development of technology and finance can effectively help independent research and development, ensure the stability and security of China’s industrial chain and supply chain, accelerate the deployment of innovation chain around the industrial chain, and escort the self-reliance and self-improvement of science and technology.
2 The current development trend of technology and finance in China
In recent years, China’s high-tech industry has developed vigorously. By the end of the third quarter of 2023, China had cultivated 103,000 specialized and innovative small and medium-sized enterprises, and 178 national high-tech industrial development zones achieved a total industrial output value of 23.5 trillion yuan. The proportion of high-tech industries has been expanding, and high-tech manufacturing has accounted for 15.3% of the added value of industrial enterprises above designated size. How to use financial services to boost the development of high-tech industries and optimize the national economic structure has become a key issue that macro-economy must answer to achieve high-quality development. In this context, China attaches great importance to the construction of technology and finance system, actively promotes the deep integration of finance and science and technology, and gives full play to the synergistic role of market and government in the development of technology and finance. It has not only initially established a diversified service system in technology and finance, including venture capital, stock market, bond market and bank credit, but also formed a market-oriented support system represented by government-guided funds to promote the development of technology and finance. technology and finance’s development has achieved remarkable results.
By the end of June 2023, the management scale of venture capital and private equity investment funds in China was nearly 14 trillion yuan, and hard technology enterprises became the hot target of equity investment. Science and technology innovation board injected a strong impetus into the development of science and technology enterprises, successfully promoted more than 500 enterprises to realize IPO, and raised nearly one trillion yuan; Beijing Stock Exchange strives to promote the formation of a full-chain service system to support the innovation and development of small and medium-sized enterprises, and has become the main position to build innovative small and medium-sized enterprises with services. Among them, more than 80 enterprises have been selected into the national list of "Little Giant" enterprises with specialization and innovation, and over 80% of the companies have been selected into the list of provincial and municipal enterprises with specialization and innovation. In addition to equity financing, technology and finance’s related debt financing has also increased significantly, with the balance of Kechuang bills and Kechuang corporate bonds of about 450 billion yuan, and the balance of medium and long-term loans for high-tech manufacturing, loans for small and medium-sized science and technology enterprises and loans for "specialized and innovative" enterprises of 2.5 trillion yuan, 2.36 trillion yuan and 2.72 trillion yuan respectively, maintaining a growth rate of over 20% for many years. In addition, in order to effectively solve the information asymmetry between science and technology enterprises and financial institutions and the financing difficulties of science and technology enterprises, since 2020, the Torch Center of the Ministry of Science and Technology has launched an enterprise innovation point system to "portrait" the innovation ability of enterprises through the form of innovation points, identify and discover science and technology enterprises with strong innovation ability and great growth potential, and encourage financial institutions to provide credit support in combination with scientific and technological innovation evaluation.Guide local governments to open up direct channels for fiscal, taxation, science and education, industry, finance and other policy resources to support enterprise innovation.
With the rapid ecological progress in technology and finance, China, the government-guided fund has played an important role in promoting scientific and technological innovation and promoting the structural reform of the financial supply side. By the third quarter of 2023, governments at all levels had set up 1,557 government guidance funds, with a management scale of nearly 3 trillion yuan. The investment field focused on cutting-edge technology, of which funds led by strategic emerging industries accounted for 50%, which played an increasingly prominent role in promoting scientific and technological progress and promoting regional development.
3 to cope with the challenges facing the development of technology and finance.
To do a good job of technology and finance’s great article needs to be rooted in the national conditions. We should not only understand the inherent characteristics of finance, but also grasp the development law of scientific and technological innovation, and rationally treat the difficulties and challenges faced by technology and finance in its development process.
First of all, based on the current situation of China’s financial development, we must explore the road of high-quality development in technology and finance by promoting the mutual complement of direct financing and indirect financing, and uniting multi-channels to support scientific and technological innovation. China’s financing structure has been dominated by indirect financing for a long time, and credit assets account for more than half of the total financial assets. However, scientific and technological innovation, especially some frontier scientific and technological innovation projects, often involve a lot of investment, a long period of time and high risks, and there is great uncertainty in research and development results, so it is difficult for indirect financing to meet the demands of scientific and technological innovation enterprises for capital and financial risk management at the same time. Indirect financing takes creditors’ fixed interest income as economic incentive, and lacks innovative benefit sharing mechanism, and financial institutions providing indirect financial services also lack the motivation to share innovative risks. The intrinsic value of science and technology enterprises is more reflected in the intangible assets formed by innovation, such as technological advantages, patents, intellectual property rights, etc. It is more difficult to evaluate their assets, and they often do not have the conditions to obtain financing through mortgage loans of tangible assets. However, the financing demand for technology transformation is expanding rapidly, which will lead enterprises to face the problems of financing difficulties, expensive financing and slow financing.
Secondly, the development of technology and finance not only needs financial institutions to closely contact professional scientific research institutions, but also needs the government to fill the weak links in the system from the aspects of rule of law, finance and taxation, scientific research, credit and talents, and improve the support and guarantee for the development of technology and finance. Financial services must weigh the benefits and risks, but technological innovation itself has great risks. Scientific and technological innovation not only faces a long innovation chain and transformation chain, but also faces the increasing change of science and technology, and the innovation results may be born behind. Moreover, the complexity of scientific and technological innovation leads to the prominent problem of information asymmetry between science and technology-based enterprises and financial institutions. It is often difficult for financial institutions and even government departments to effectively assess the technological risks of science and technology-based enterprises, and it is easy to cause institutional arbitrage due to information asymmetry, which ultimately affects the accuracy of technology and finance’s services.
Finally, the development of technology and finance urgently needs to strengthen the overall planning and policy coordination, and the relevant regulatory authorities need to rationally and objectively look at and steadily promote the development of technology and finance. First, in recent years, the state has issued a series of policies to support scientific and technological innovation and the development of technology and finance, but the policy support system is not accurate enough, which leads to difficulties in policy implementation, which not only increases the burden of government expenditure, but also distorts reasonable innovation incentives. Second, when large-scale scientific and technological innovation enterprises become the service targets of the financial industry, the inherent R&D risks of scientific and technological innovation will also be transformed into financial risks. At the moment when the development trend of interdisciplinary and cross-border infiltration is more obvious, the scientific research organization model of division and governance cannot be rapidly transformed, which will also increase the backward risks of related scientific and technological innovations.
4 Identify the path of action to promote the development of technology and finance.
To effectively guide the financial industry to serve China’s scientific and technological innovation, we should not only co-ordinate the overall situation at home and abroad, make full use of the domestic and international markets and resources, but also co-ordinate the two major events of development and security, prevent the risks brought by technology and finance while promoting the high-quality development of technology and finance, and effectively identify the right path of action.
First, improve relevant institutional mechanisms and establish a diversified technology and finance system. A perfect multi-level capital market is the market foundation for technology and finance’s high-quality development. We should further improve the listing and trading systems of GEM, science and technology innovation board and Beijiao Stock Exchange, as well as the listing and trading systems of the New Third Board and regional equity markets, so as to provide more financing channels for scientific and technological innovation enterprises. Guide and support all kinds of financial institutions to carry out technology and finance services, encourage financial institutions to innovate financial products and services, guide and support equity investment institutions to carry out scientific and technological investment business, meet the financing needs of different types of scientific and technological innovation at different stages, and provide more financial support for scientific and technological innovation enterprises. The government should increase the research and investment in scientific and technological innovation, keep up with the cutting-edge scientific and technological direction, and work with the market to screen out scientific and technological innovation tracks with technical and market potential. Increase the input of government guidance fund in a timely manner to improve its guidance effect and leverage. The healthy development of government-guided funds can not be separated from a perfect exit mechanism. We should design a reasonable income distribution scheme on the basis of improving investment decision-making ability to ensure that government-guided funds can achieve their own sustainable development while supporting scientific and technological innovation and industrial upgrading.
Second, promote the deep integration of technological innovation and financial innovation, and realize the coordinated development of technology and finance. On the one hand, adapt to the financial needs of technological innovation and promote technological innovation with financial innovation. The financial system should provide all-round financial services for technological innovation, encourage traditional financial institutions to innovate financial products and services, and support financial institutions to cooperate with technological innovation enterprises to jointly develop innovative financial products and services. On the other hand, accelerate the financial sector to embrace cutting-edge technology and empower financial services with technological innovation. Financial institutions accelerate digital transformation and adopt advanced scientific and technological means, which can improve the efficiency of financial services and provide broader development space for scientific and technological innovation, and use financial and technological means such as data credit enhancement, corporate portrait and technical patent evaluation to broaden financing channels for scientific and technological enterprises.
Third, enhance the support and guarantee capacity of technology and finance’s policies and improve the supporting system of technology and finance’s development. In terms of basic guarantee, the foundation of technology and finance’s high-quality development lies in the continuous improvement of relevant supporting infrastructure systems, including technology and finance information platform, science and technology patent database and technology and finance service platform, so as to provide necessary technical support and infrastructure guarantee for the development of technology and finance. Among them, the construction of technology and finance-related credit information system is the key. We should focus on establishing a perfect credit system in technology and finance, including the credit information publicity system of scientific and technological enterprises and the basic database of personal credit information, actively promote the sharing of credit information among financial institutions, credit reporting agencies and public institutions, break down the information barriers, and jointly provide more comprehensive and accurate credit information support for technology and finance. The government pays attention to providing a series of support policies, such as financial support, tax incentives and credit support, to increase the training and introduction of talents in technology and finance.
Fourth, improve the level of risk management and supervision in technology and finance to ensure the healthy and sustainable development of technology and finance. First, strengthen the risk management capabilities of financial institutions. Financial institutions should not only adapt to the development trend of technology and finance, clarify the risk management objectives and strategies, strengthen risk identification, evaluation and control, and ensure that the business risks in technology and finance can be controlled, but also strengthen the monitoring and early warning of the business in technology and finance, so as to find and deal with potential risks in time and prevent the risk from spreading and spreading while accelerating the construction of the risk firewall system. Actively promote the application of scientific and technological innovation in risk management, empower the development of technology and finance with financial scientific and technological innovation, and improve the efficiency and accuracy of risk management. Secondly, increase support for science and technology insurance and guarantee, encourage and support insurance companies and guarantee institutions to carry out science and technology insurance and guarantee business, and provide risk protection for science and technology innovation enterprises. Finally, constantly improve the supervision system in technology and finance, establish supervision rules and standards suitable for the development of technology and finance, ensure the effectiveness and fairness of supervision, coordinate development and safety, and form a joint force of government guidance, market operation and social participation to jointly promote the healthy and sustainable development of technology and finance.
Guangming Daily (11th edition, December 19th, 2023)