Yesterday’s State Council executive meeting again highlighted “mass entrepreneurship and innovation.” The State Council held 20 executive meetings since this year, and the “mass entrepreneurship and innovation” initiative was mentioned no less than 12 times.
The meeting deliberated and approved a guideline to further enhance the support for innovation and entrepreneurship. The State Council introduced a series of measures in innovating government management, optimizing services for mass entrepreneurship and innovation, expanding financing channels, promoting industrial upgrading and strengthening talent support.
Steadily expand bond pilot program in startups
To expand financing channels, China will support local corporate banks to set up branches to provide inclusive finance services, promote financing via patent pledge and other intellectual property rights; support insurance companies to provide relevant insurance services, encourage local governments to provide risk compensation or subsidies for premium; steadily expand bond pilot program in startups; promote government-funded funds to set up and support venture capital fund; explore supportive policies for high-tech business incubators.
Zhang Jun, chief economist with Morgan Stanley Huaxin Securities, said in an interview with the SSN that to make innovative a real driver of the economy, China needs to make innovative in system and mechanism, including macro policy and micro financial sector. “Most innovative enterprises are small and micro enterprises. They have been facing difficulties in getting financing and high financing cost under the traditional financial system. It is urgent to solve this problem.”
In fact, these measures introduced to expand financing channels have already been mentioned in earlier documents. The meeting just emphasized these measures again.
For example, the meeting mentioned “steadily expand bond pilot program in startups”.
Few days ago, the China Securities Regulatory Commission (CSRC) released a guideline on carrying out bond pilot program in startups. CSRC spokesperson Gao Li said at a regular press conference held last Friday that to carry out bond pilot program in startups is of great significance to give further play to the exchange bond market, practically support startups to get financing, optimize the capital formation mechanism in medium and small-size enterprises and enrich the structure of corporate bond issuers. The CSRC will next promote the bond pilot program in startups.
Tang Jianwei, chief macro analyst with Bank of Communications Financial Research Center told the SSN that “in addition to financing via banks, the government also encourages getting financing by issuing bonds, conducting IPO or via other capital market instruments. This will help solve startups’ difficulties in getting financing.”
Prepare strategic outline to promote the development of digital economy.
In addition to expanding financing channels, the meeting also proposed other measures.
In regard to innovating government management, the meeting proposed to relax control over access to online education and other industries; implement inclusive and prudential supervision on new industry forms and new models.
In regard to optimizing services for mass entrepreneurship and innovation, the meeting proposed to explore a mechanism that can ensure timely commercialization of scientific achievements with fiscal support in strategic emerging areas, streamline the evaluation and filing procedures for patents and other intangible assets and price intangible assets via negotiation, listing or auction.
In regard to promoting industrial upgrading, the meeting proposes to speed up the construction of industrial Internet platform to guide large enterprises to carry out innovation and entrepreneurship; open supply chain resources and market channels to promote the integrated development between the industry upstream and downstream and among large-, medium and small-size enterprises; prepare a strategic outline to promote the development of digital economy.
In regard to strengthening talent support, the meeting proposed to adapt to new and flexible employment patterns, improve social security, tax and other related policies, implement and expand the autonomy of colleges, universities and scientific research institutes in incentives for talents, allow the use of collective land for innovation and entrepreneurship。
Analysts pointed out that these measures should be major contents in the upcoming guideline. Previously, the State Council rolled out a number of documents on innovation and entrepreneurship. The wording “strengthen” and “further” shows the government’ resolute in deepening the innovation-driven development strategy.
Tang Jianwei said that the State Council recently issued plenty of policies to support innovation and entrepreneurship for two reasons. On the one hand, as the economy is a downturn, to support innovation and entrepreneurship will cultivate new growth driver, transform old impetus to new ones while stabilizing economic growth. On the other hand, to encourage the development of innovative enterprises and support innovation and entrepreneurship is very essential to make up short links in the new economy while cutting excessive productivity in backward industries under the background of the supply-side structural reform.
He stressed that one of the major aspects of a county’s competitiveness lies in the competitiveness of the country’s enterprises. To encourage and develop some emerging enterprises with international competitiveness via innovation and entrepreneurship is of great importance to enhance the international competitiveness of China's economy.
Translated by Coral Zhong
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