In recent years, there has been substantial momentum in China's pursuit of technological innovation, reflecting a broader strategic vision that emphasizes the development of science and technology enterprises as key drivers of economic and social progressThis belief was evident during the recent legislative sessions in Beijing, where Huang Yi, chairman of Meichen Investment and a member of the Beijing Municipal Political Consultative Conference, presented proposals aimed at diversifying support for the growth of innovative businessesThe ongoing evolution of these enterprises has become increasingly significant, as they contribute substantially to national competitiveness in technology and industrial advancement.

The statistics speak volumes about the trajectory of innovation in the private sectorThe top 500 private enterprises in China secured a staggering 666,700 effective patents, marking a 9.39% increase from the previous yearDomestic patents were up by 8.86%, while international patents saw an impressive growth of 13.61%. This data not only underscores the drive of these enterprises to innovate but also points to a growing recognition of the importance of intellectual property as a valuable asset in the global market.

Huang Yi's assessment is clear: technological innovation stands as a vital impetus for societal advancementThe health of science and technology enterprises is intrinsically linked to the nation's future strategic capabilitiesDespite the significant strides made, these enterprises frequently confront challenges, particularly in securing adequate financing essential for their operationsHuang Yi notably emphasized the need for expanding funding channels and implementing robust multi-faceted support mechanisms to alleviate the financial pressures on these companies.

The current landscape presents a paradox; while overall R&D expenditures in China have surged, the challenges confronting science and technology enterprises—especially those in their nascent and growth phases—remain daunting

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According to the China Enterprise Federation and the China Entrepreneurs Association’s 2024 report on the top 500 companies, these leading firms invested over 1.8137 trillion yuan in R&D in 2023, reflecting a 14.89% increase year-on-yearHowever, the journey for start-ups in the tech sector often proves perilous due to elevated risks, market uncertainties, and challenging conditions that hinder access to sufficient funding.

In light of these realities, Huang Yi called for a more nuanced approach to financing strategies, as discussed during the recent Central Economic Work ConferenceThe conference underscored the importance of nurturing a multi-layered financial service system, building patient capital, and establishing stronger frameworks for social capital engagement in venture investmentsHowever, more than just traditional finance is needed; innovative financial service models are crucial to address the varying needs of different innovative enterprises at different growth stages.

Huang Yi proposed comprehensive recommendations to tackle the pressing issue of financing for science and technology businessesFirstly, he suggested that governments should establish or augment guiding funds dedicated to tech enterprises, providing them with stable funding sources through direct investments, guarantees, and interest subsidies on loansThe rationale behind this is that such funds not only relieve financial burdens but also lend credibility to these companies through government endorsement, thereby attracting additional market confidenceThese guiding funds should specifically target projects that are innovative, possess substantial market potential, and exhibit high technological content—ultimately driving the optimization and upgrade of industrial structures.

Furthermore, Huang Yi advocated for the government to enact fiscal policies, such as tax incentives and risk compensation measures, to stimulate and direct venture capital investment into science and technology enterprises

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As essential catalysts of innovation, venture capital firms possess the expertise and market acuity necessary to provide strategic insights and assist in market penetration efforts for these companiesTo facilitate better alignment between venture capitalists and tech enterprises, he recommended creating matching platforms that enhance connectivity and reduce inefficiencies in identification and collaboration.

Another critical aspect highlighted by Huang Yi is the enhancement of a multi-tiered capital market, which plays a pivotal role in financing for science and technology enterprisesExpanding direct financing avenues such as equity and bond markets is imperativeHe stressed the necessity of simplifying the listing process to offer more opportunities for tech companies seeking to go publicAdditionally, regional equity trading markets should be developed to introduce more flexible financing solutionsStrengthening market regulations to protect investor rights while ensuring fairness, justice, and transparency in operations is also essential for fostering a healthy development environment for innovative firms.

Moreover, Huang Yi encouraged commercial banks to establish dedicated branches or specialized agencies tailored to serve tech enterprisesBy delivering customized financial products—such as intellectual property pledge loans and accounts receivable financing—banks could address the varied financing needs of these innovative businessesCoupled with government initiatives to provide interest subsidies and credit guarantees, such measures could significantly lessen the financial burdens faced by these firms.

In addition to the above strategies, Huang Yi suggested further developing the social credit system, deepening the synergy between industry, academia, and research, and promoting international collaboration and exchangeA holistic social credit framework is foundational to the diversified capital support system that a thriving innovation ecosystem demands

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