On Tuesday, China unveiled a set of new guidelines aimed at bolstering financial services for technology companies, with a focus on enhancing technological innovations and establishing new productive forces.

The guidelines were jointly released by the National Financial Regulatory Administration (NFRA), the Ministry of Science and Technology, and the National Development and Reform Commission.

They consist of seven priority areas and outline 20 specific measures designed to improve financial and tech services, ultimately fostering professional competency and enhancing risk-control capabilities.

The guidelines seek to synchronize regulatory, technological, and developmental policies to eliminate existing bottlenecks in the flow of capital to technology firms.

By increasing the availability of financial resources for technological innovation, authorities have urged banks and insurance companies to explore investment opportunities earlier, with smaller amounts and longer-term commitments directed towards core technologies.

Experts have noted that these guidelines provide a comprehensive framework for the financial sector to advance technological development and to facilitate the actualization of research outcomes from tech enterprises.

This initiative is a continuation of China's previous efforts to reform the financial landscape in support of technological advancement, now accompanied by more specific directives.

A significant emphasis is placed on early-stage investments in technology enterprises, coupled with sustained financial support for small and micro-sized businesses.

This tactic is intended to encourage the development of tech companies, granting them the necessary leeway for experimentation and failure, according to Zhou Rong, a senior researcher at the Chongyang Institute for Financial Studies.

The guidelines delineate a five-year objective for banks and insurance firms to develop a financial services framework that aligns with the high-priority and emerging sectors of innovation.

The directives are expected to prompt financial institutions to increase credit issuance related to technology, fortify insurance support for innovations, and initiate pilot programs to enhance cooperation in venture capital.

The focus on debt financing aims to channel additional resources towards fostering innovation within tech firms.

Additionally, the guidelines underscore the importance of a policy synergy and cohesive coordination approach to introduce targeted measures that will facilitate the effective circulation of funds.

They propose augmenting credit lending and introducing medium- to long-term loan structures for technological enterprises, along with offering more flexible loan terms, including extended repayment periods.

The guidelines also stress the pivotal role of the insurance sector, advocating for pilot reforms aimed at fostering long-term investment by insurance funds.

There is a provision for insurance companies to initiate private securities funds for investment in the stock market and to boost venture capital engagement.

Moreover, a comprehensive pilot program focused on intellectual property (IP) is recommended, outlining steps to establish a financing ecosystem based on IP and to broaden financial services related to IP, including the exploration of internal valuation trials.

This initiative is aligned with recent developments in China's financial sector.

In March, the State Council called for improvements in financial support for technological innovation, advocating for a coordinated approach that employs equity, debt, insurance, and other capital means to deliver comprehensive financial services throughout the lifecycle of technology companies.

The emphasis is particularly on supporting major national science and technology initiatives and technology-based small and medium-sized enterprises.