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Fintech Finance. 
* The Financial Work Conference proposed to do a good job in the "five major articles" of science and technology finance, green finance, inclusive finance, pension finance and digital finance, and pointed out the direction for the construction of a financial power. As the first of the "five major articles", the proposal of science and technology finance not only reflects the great importance attached to science and technology at the first level, but also gives a new historical mission to financial service technology.
At present, the development of science and technology finance has achieved remarkable results, banking financial institutions have become the "main force" of science and technology finance, the capital market has become the "new force" of science and technology finance, and science and technology insurance has helped science and technology enterprises to manage risksIt should be noted that the development of science and technology finance in China is also facing some challenges. Under the new situation, what is the development direction of technology finance? How to promote innovation in technology and finance? Follow together.
What is FinTech?
So far, the discussion of science and technology finance at the policy level, academia and industry is more about how finance supports technology enterprises and technological innovation. Specifically, for science and technology finance, it is necessary to interpret it from three aspects: the narrow and broad perspectives of the demand side of science and technology finance and the supply side of science and technology finance. The narrow perspective of the demand side of science and technology finance is usually limited to specific types of science and technology innovation enterprises and their innovation activities, and the broad perspective of the demand side of science and technology finance can cover all science and technology innovation subjects or all innovation activities. The supply side of science and technology finance refers to the subject and form of providing science and technology financial services.
First, from the narrow perspective of the demand side of science and technology finance, science and technology finance refers to financial products and services that are committed to supporting the development of science and technology innovation enterprises. On the one hand, scientific and technological innovation enterprises usually refer to enterprises with a high degree of technology application and outstanding product innovation and sustainable development capabilities. According to the relevant policies of China, scientific and technological innovation enterprises can usually be divided into high-tech enterprises, technology-based small and medium-sized enterprises and technologically advanced service enterprises. On the other hand, in the face of the financial needs of different types of technology enterprises, financial institutions can provide general products and services, and can also customize more specialized technology financial products.
Second, from the broad perspective of the demand side of science and technology finance, science and technology finance refers to financial products and services that support various science and technology innovation activities. Scientific and technological innovation is a general term for original scientific research and technological innovation, which refers to the process of creating and applying new knowledge, new technologies and new processes, adopting new production methods and management models, as well as developing new products, improving product quality and providing new services. Scientific and technological innovation can usually be divided into knowledge innovation, technological innovation and management innovation. Correspondingly, financial support for scientific and technological innovation has a broader connotation, such as including both typical "hard" and "soft" technology and model innovation; It includes not only basic major scientific and technological breakthroughs, but also applied technological innovation towards marketization; It includes not only supporting science and technology enterprises included in various industrial policy support catalogs, but also paying attention to the scientific and technological innovation and technological upgrading activities of traditional enterprises.
Third, from the perspective of the supply side of science and technology finance, science and technology finance can include core financial functions such as investment and financing, payment and settlement, risk management, and information management for science and technology enterprises and science and technology innovation, as well as core financial elements such as financial institutions, financial markets, and financial products that support science and technology enterprises, science and technology innovation, and financial policies, financial systems, financial ecology, and financial infrastructure for ensuring and serving science and technology innovation. Especially from the perspective of financing, technology finance is far more than the technology credit that all parties are most concerned about, but also includes many other direct financing and structured finance products. At the same time, it should be noted that with the continuous deepening of the development of financial technology and digital finance, the supply-side entities of technology finance are not limited to licensed financial institutions, but also include a large number of emerging technology enterprises, data enterprises, platform enterprises and intermediary service organizations.
The development status of science and technology finance in China.
In practice, the scope of China's science and technology finance policy support and science and technology finance statistics is usually based on the narrow perspective of the demand side of science and technology finance, that is, it is limited to specific types of science and technology innovation enterprises and their innovation activities, and their development presents the following characteristics:
First, banking financial institutions have become the "main force" of science and technology finance. In recent years, many commercial banks have made efforts to develop exclusive technology credit products, innovate franchised credit systems, and set up franchised institutions and service teams to achieve differentiated and customized product support and services. According to the statistics of the State Administration of Financial Supervision and Administration, as of July 28, 2023, China has set up more than 1,000 science and technology characteristic sub-branches and science and technology finance franchise institutions. According to data released by the People's Bank of China, as of the end of June 2023, the balance of medium and long-term loans for high-tech manufacturing was 25 trillion yuan, a year-on-year increase of 415%, maintaining a high growth rate of more than 30% for three consecutive years; The balance of loans for small and medium-sized enterprises in science and technology is 236 trillion yuan, a year-on-year increase of 251%, maintaining a high growth rate of more than 25% for 3 consecutive years; The balance of loans for "specialized, special and new" enterprises in the country is 272 trillion yuan, a year-on-year increase of 204%, maintaining a growth rate of more than 20% for three consecutive years. In addition, in November 2023, the "Statistical Report on Loan Investment of Financial Institutions in the Third Quarter of 2023" released by the People's Bank of China showed that at the end of the third quarter of 2023, technology-based SMEs that received loan support were 21280,000, the loan rate (i.e., the ratio of the number of enterprises receiving loans to the total number of enterprises in the directory) was 47%, 2 higher than the end of the previous year7 percentage points; The balance of domestic and foreign currency loans for small and medium-sized technology-based enterprises was 242 trillion yuan, a year-on-year increase of 226%, 12 higher than the growth rate of various loans in the same period4 percentage points.
Second, the capital market has become a "new force" in science and technology finance. In recent years, the reform of the registration-based system in the capital market has been deepened, relying on the multi-level service system including the Science and Technology Innovation Board, the Growth Enterprise Market, and the Beijing ** Stock Exchange, etc., to continue to increase support for science and technology enterprises and scientific and technological innovation. According to the data released by the Ministry of Industry and Information Technology, as of July 27, 2023, more than 1,600 "specialized, special and new" small and medium-sized enterprises have been listed on the A-share market, accounting for more than 30% of the total number of A-share listed enterprises; Among the newly listed companies in 2023, 60% are "specialized, special and new" small and medium-sized enterprises. In addition, the relevant financial management departments have also launched bond products such as science and technology innovation bills and science and technology corporate bonds to broaden the direct financing channels of science and technology enterprises; Guide the sustainable and healthy development of venture capital and private equity investment**. According to the statistics of the People's Bank of China, as of the end of June 2023, the balance of science and technology innovation notes and science and technology innovation company bonds is about 450 billion yuan, of which the balance of science and technology innovation notes issued by science and technology enterprises has reached 226.4 billion yuan, and the balance of science and technology innovation company bonds has reached 225.8 billion yuan; Venture capital and private equity investment** have nearly 14 trillion yuan under management. It has strongly supported the diversified risk financing needs of technology enterprises.
Third, technology insurance helps technology enterprises manage risk. In November 2021, the former China Banking and Insurance Regulatory Commission (CBIRC) issued the Guiding Opinions on Supporting High-level Technological Self-reliance and Self-reliance in the Banking and Insurance Industry, requiring insurance institutions to strengthen the role of technology insurance protection and strengthen technology insurance services. According to incomplete statistics, there are dozens of science and technology insurance types in China, covering product research and development of science and technology enterprises, intellectual property protection, loan guarantee, health and accident risk protection of key research and development personnel. At the same time, encouraging insurance funds to connect with the financing of science and technology enterprises is also an important part of achieving a win-win situation between insurance and technology. For example, according to the Notice on Optimizing the Regulatory Standards for the Solvency of Insurance Companies issued by the State Administration of Financial Supervision and Administration in September 2023, it can be seen that for insurance companies investing in the equity of unlisted companies in national strategic emerging industries, the risk factor (i.e., the capital occupation of the insurance company's investment and operation business, and lowering the risk factor, which means that the insurance company can make more investment) should be 04；The minimum capital is measured by applying the property insurance risk factor to science and technology insurance, and the solvency adequacy ratio is calculated according to 90%.
Fourth, the exploration and reform of science and technology finance policies have been deepened. In recent years, the leading departments and financial regulatory departments have continuously improved the policy system related to science and technology finance, and have initially established a comprehensive policy support mechanism. For example, in October 2023, the five departments of Shenzhen jointly issued the "Implementation Opinions on Financial Support for Scientific and Technological Innovation". In addition, according to the information released by the People's Bank of China, as of July 27, 2023, the People's Bank of China has jointly established pilot zones for scientific and technological innovation financial reform in seven places, including Beijing, Shanghai and Jinan, and has formed a number of experience and practices that can be replicated and promoted. Further deepening of cross-border financing facilitation for China's science and technology enterprises: steadily promote the pilot policy of cross-border financing facilitation, allow small, medium and micro high-tech enterprises to borrow foreign debts within a certain limit, promote the foreign exchange management pilot of qualified foreign limited partners, and encourage and guide foreign capital to participate in investment in domestic science and technology enterprises through private equity.
It should be noted that although the current development of science and technology finance has achieved remarkable results, it also faces some challenges. First, the depth of science and technology financial services in key areas is still insufficient, especially for major national scientific and technological innovation fields, science and technology small and medium-sized enterprises, financial support for the transformation and industrialization of scientific and technological achievements, etc.; In addition, there is insufficient support for STI activities from a broad perspective. The second is single.
1. There are more and more innovative products of science and technology finance, but there is still a lack of financial services that can effectively cover the whole chain of scientific and technological innovation and the whole life cycle of science and technology enterprises. Third, the space for direct financing to support science and technology enterprises and scientific and technological innovation has not been fully opened, especially venture capital that matches the characteristics of scientific and technological innovation, which has not yet played its due role due to various factors. Fourth, banks and non-bank financial institutions that provide science and technology financial services lack an efficient matching incentive and restraint mechanism, and at the same time, the ability to understand and evaluate scientific and technological innovation is insufficient, the allocation of competitive compound professionals is relatively limited, and the level of risk understanding and control of scientific and technological activities needs to be improved. Fifth, the intensity of policy financial support and the richness of policies are still insufficient, especially for the bottom, major and cutting-edge technological innovation fields that are difficult to rely on market forces alone, and it is necessary to continue to explore the path and model of policy financial support. Sixth, the lack of systematic and credible credit assessment models and rating standards for science and technology enterprises makes it difficult for science and technology enterprises with "high labor costs, high R&D investment, and light assets" to meet the access standards for financial services, and the corresponding credit enhancement means are insufficient, and efforts are still needed to solve the problem of "difficult evaluation" of intellectual property pledge financing. Seventh, the comprehensive risk management and decentralization mechanism for the needs of science and technology enterprises and scientific and technological innovation still needs to be improved, the development of existing science and technology insurance, guarantee and other products is lagging behind as a whole, and the innovation of new risk management tools for the whole industry chain is obviously insufficient. Eighth, the business uncertainty of science and technology enterprises, especially small and medium-sized technology enterprises, is strong, and the degree of information standardization, transparency and disclosure needs to be improved, and they also lack sufficient financial "effective demand" capabilities. With the internationalization trend of scientific and technological innovation, foreign capital with a high willingness to invest in the field of science and technology should become an important force to support the development of science and technology finance, but due to the influence of complex factors at home and abroad, some problems have been encountered in the past two years. Tenth, the exploration of using financial technology achievements to support scientific and technological innovation is insufficient, and new technologies such as big data and artificial intelligence are not fully used to drive the efficient integration of financial resource chain, technological innovation chain, information chain and industrial chain.
Under the new situation, what is the development direction of technology finance?
Enhance the endogenous driving force of economic development and help the implementation of the strategy of strengthening the country. The core value of modern finance is to contribute to the high-quality development of the economy and society, therefore, the strategic design of the development strategy of science and technology finance cannot be limited to the institutional and product level, but needs to be measured by the ultimate benefits and effects of science and technology financial activities. The first is to promote scientific and technological innovation through science and technology finance, and then truly implement it at the industrial level, so as to realize a virtuous circle of science and technology, industry and finance, drive economic efficiency, and ultimately improve total factor productivity (usually regarded as a comprehensive reflection of the role of technological progress on economic development). Second, through the "leverage" role of science and technology finance, it will not only enhance the basic scientific research capabilities, make the country's comprehensive competitiveness and structural comparative advantages more prominent, but also support applied technological innovation, so as to help industrial upgrading, enhance economic activity and meet the challenges of employment.
Serve to build a sustainable market-oriented innovation system. The development of science and technology finance should not only follow the law of financial development, but also respect the internal law of science and technology innovation. On the one hand, adhere to the market demand-oriented, truly establish a mechanism for the transformation of scientific and technological achievements led by industries and enterprises, avoid excessive intervention and inefficient intervention, and cannot simply superimpose all kinds of innovation subjects, innovation models, and innovation elements arbitrarily, but rely on the cutting-edge characteristics and forward-looking path of modern scientific and technological innovation, rely on the power of finance to create a new innovation consortium model, and stimulate the endogenous power of "integration of government, industry, academia, research and application". On the other hand, the support objects of science and technology finance need to be gradually expanded from a narrow sense to a broad sense, not only with key core technologies and "hard" technological innovation as the main line, but also to support various business innovations, model innovations, ecological innovations, etc. It is worth noting that promoting the development of the digital economy and the integration of data and reality has become an important national strategy, whether it is the high-end part of digital industrialization or the abundant blue ocean of industrial digitalization, it is an important starting point for science and technology finance to help innovation.
From focusing on scale to focusing on quality, we will strive to build a strong country in science and technology finance. On the whole, China's financial system has experienced rapid development for many years, and many indicators, including the asset scale of banking financial institutions, have been in the forefront of the world, but the overall situation is still "big but not strong". In view of this, the ** Financial Work Conference in October 2023 emphasized that at present and in the future, doing a good job in financial work should "take accelerating the construction of a financial power as the goal and promoting high-quality financial development as the theme". Since 1985, the "Decision of the Communist Party of China on the Reform of the Science and Technology System" proposed that venture capital can be set up and technology development loans can be applied to banks, China's science and technology finance exploration has made remarkable achievements, and many financial institutions have taken science and technology finance as an important business development direction. However, although there is still room for growth in the scale of science and technology financial products, there are also some sports and inefficient phenomena in the development, which requires more attention to the innovation quality, structure and efficiency of science and technology finance, and solve the imbalance and inadequacy in the layout of existing science and technology financial services as much as possible.
It attaches great importance to the innovative exploration of new technology finance in the context of digitalization. On the one hand, the current focus of innovation in fintech and digital finance is shifting from the residential side to the enterprise side, which plays an important role in alleviating the high cost and low efficiency of traditional financial services faced by specific industries, and the financial support for the technology sector has also achieved efficiency improvement. For example, in the past two years, various departments have formulated a number of policies for the development of the chain finance, forming an institutional framework for promoting and regulating the development of the chain finance industryAt the same time, the in-depth application of new technologies has also accelerated the transformation of the financial industry to digitalization and intelligence, and an endless stream of business models has emerged, among which the technology-based small and medium-sized enterprises in the industrial chain are the beneficiaries of the development of digital chain finance. On the other hand, different financial institutions are paying more and more attention to fintech investment, for example, according to the annual report data released by various commercial banks, in 2022, the six major state-owned banks will invest the largest, among which the Industrial and Commercial Bank of China will rank first in fintech investment, as high as 2622.4 billion yuan, Agricultural Bank of China, Bank of China, China Construction Bank, Bank of Communications and Postal Savings Bank of China financial technology investment reached 232 respectively1.1 billion yuan, 2154.1 billion yuan, 2329 billion yuan, 116$3.1 billion and $1065.2 billion yuan. In addition, in order to ensure the promotion and implementation of fintech strategies, banks have also increased their investment in technology talents. From this point of view, financial institutions themselves can become an important subject to put forward scientific and technological needs and stimulate new technological innovation.
Efforts should be made to optimize the ecology of science and technology finance and consolidate the foundation for innovation in science and technology finance. Financial ecology usually refers to a dynamic equilibrium system with certain structural characteristics and a certain functional role formed by financial markets, financial institutions and other entities in the process of interaction with the external institutional environment within a certain time and space range. The focus of the ecological construction of science and technology finance is to promote win-win cooperation and collaborative innovation among participants at different levels through reasonable incentive and compatibility mechanism arrangements, and strive to achieve multi-level development goals of science and technology finance through the comprehensive integration of science and technology and finance. Among them, it includes many "hard ecological elements" related to science and technology and finance, such as new data element facility guarantees, and "soft ecological elements" such as credit, standards, talents, policies, etc. In this regard, the regulatory authorities should start from optimizing the ecology of science and technology finance to promote the improvement of the "soil" for the development of science and technology finance.
How to grasp the important link of science and technology financial innovation?
Based on the demand side of science and technology finance.
Take into account both science and technology enterprises and scientific and technological innovation activities. On the one hand, all kinds of science and technology enterprises are the core force of scientific and technological innovation, and only by meeting the various financial needs of science and technology enterprises can we ensure the smooth progress of independent innovation with Chinese characteristics at the micro level of enterprisesOn the other hand, the innovation activities of traditional industries and enterprises are more restricted, and they usually lack the ability to innovate in science and technology, and at the same time, they are less likely to receive financial support from science and technology. For example, for the digital economy, it is more urgent to promote the digital transformation of industries, and it is necessary to deeply explore the innovation of financial tools and financial models, and guide the application of digital technology and data resources to increase the output and efficiency of traditional industries.
Balance the intensity and pace of support for basic major scientific and technological innovation and applied scientific and technological innovation. On the one hand, China's basic scientific and technological research and innovation capabilities are still insufficient, if only supported by financial resources, may fall into the "pepper face" (that is, the egalitarianism of resource use, equal apportionment, the so-called "sunshine" distribution mode) dilemma, if relying on financial resources support, it is necessary to have a model innovation that matches the long-term risk. On the other hand, although the financial support model of applied scientific and technological innovation is more mature, there are still problems such as unsmooth transformation of achievements and insufficient long-term capital allocation, and it is necessary to continuously explore a model that conforms to international practices and national conditions. Whether the financial support and rhythm of the two can be balanced affects whether the short-term and long-term goals of scientific and technological innovation can be coordinated.
Enhance the development resilience and financial demand capacity of technology enterprises. On the one hand, the risk and uncertainty of scientific and technological innovation are more prominent, although science and technology enterprises have comparative advantages in talents, technology, professionalism and other aspects, it does not mean that their management level, market ability, and sustainable development ability are better than those of non-science and technology enterprises. On the other hand, science and technology enterprises, especially small and medium-sized science and technology enterprises, still have certain shortcomings in understanding national financial policies, understanding the standards and requirements of the financial system, and using appropriate financial tools, which makes it difficult for them to actively connect with financial resources or put forward financial needs suitable for their own characteristics.
Based on the supply side of science and technology finance.
Continue to improve the technology financial service system of banking financial institutions. The first is to give banks a higher risk tolerance for technology and financial innovation from a regulatory perspective, and formulate a more feasible evaluation mechanism. Second, banks committed to the development of science and technology finance need to pay attention to the systematic planning of organizational structure, network layout, talent team, products and services, credit review and evaluation, risk control, assessment and evaluation, accountability and exemption and other mechanisms to adapt to the development of science and technology finance. The third is to strive to optimize the credit model and better match the valuation characteristics of technology enterprises, and at the same time focus on the "pain points" of technology enterprises, do a thorough and in-depth scientific and technological financial services, and realize a variety of combinations such as "credit + non-credit", "finance + non-finance" and "financing + financial intelligence". Fourth, we should seize the key science and technology fields to establish franchise teams, improve professional capabilities, and explore cooperation with various institutions and organizations, and continue to build a win-win mechanism for science and technology finance. Fifth, we should give full play to the capital and operational advantages of policy banks, increase medium and long-term financial support, and help science and technology enterprises solve key core technical problemsAt the same time, we will use structural monetary policies such as re-lending for scientific and technological innovation to achieve effective coordination between policy-based financial services and commercial financial services.
Continuously improve the ability of the capital market to serve technology enterprises. First, the capital market should not be in a hurry to support scientific and technological innovation, and it is necessary to build a good incentive and restraint mechanism for scientific and technological innovation. The second is to implement the "Action Plan for Increasing Support for the Financing of Technology-based Enterprises" deliberated and approved by the executive meeting in June 2023, and continue to improve the "green channel" for listing and financing, bond issuance, mergers and acquisitions and restructuring of technology-based enterprisesOptimize the equity incentive system mechanism of science and technology enterprises;Improve the financing environment of technology-based listed companies;Appropriately improve the inclusiveness of the restructuring and valuation of asset-light technology-based enterprises, and support technology-based enterprises to comprehensively use various payment tools to implement restructuring. The third is to give full play to the role of venture capital, strive to improve the industrial chain of science and technology investment, and explore and optimize tax and other related policies, so as to form more adequate long-term capital in the field of science and technology. The focus is to smooth the whole chain of "fundraising, investment, management and withdrawal" of venture capital institutions, expand the medium and long-term funds of venture capital, and improve diversified exit methods such as IPO (initial public offering), M&A transactions, agreement transfers, repurchases, and liquidation.
Actively play the supporting role of non-bank financial institutions. The potential market for non-bank financial institutions to help technology finance is large. For example, trust companies can combine the individual needs of technology enterprises, rely on big data and new technologies, explore new models of differentiated management of collateral, online management and dynamic management, provide movable property and rights financing and related trust financial and legal services, and explore and carry out new rights and interests management and services such as intellectual property trusts, data trusts, and digital chain trusts. Another example is that financial leasing will have a great future in supporting scientific and technological innovation, and intellectual property rights such as patents of science and technology enterprises can be used as leasing objects to explore the provision of leasing services for technology-intensive enterprisesWe will further innovate the "leasing and investment linkage" model, and strive to provide technology enterprises with customized and standardized products, so as to share risks and benefits with enterprises while assisting technology enterprises in financing.
Comprehensively optimize the risk management mechanism of science and technology finance. First, in the face of the high-growth and high-risk characteristics of technology enterprises, technology financial service institutions are urged to build highly professional teams and continuously improve their ability to control special financial risks. The second is to further innovate and support the development of insurance products and models for science and technology enterprises, provide diversified risk sharing mechanisms for various scientific and technological innovation and application scenarios, and help science and technology enterprises manage the risks of the whole process of R&D, production, sales, after-sales and other business activities. The third is to promote the innovation of the financing guarantee business model serving science and technology enterprises, give full play to the complementary role of science and technology insurance, and jointly improve the risk compensation mechanism of science and technology finance.
Based on the promotion of the virtuous cycle of "science and technology-industry-finance".
In December 2022, the ** Economic Work Conference pointed out: "Promote the virtuous cycle of 'science and technology-industry-finance'. This means that science and technology finance is not only a unilateral financial support for science and technology, but should work with the industry to achieve deeper and endogenous interaction and integration.
Actively explore financial support models around innovative enterprise clusters and innovative industrial chains. The cluster of innovative enterprises realizes the economies of scale of scientific and technological resources, and the innovation industry chain reflects the complementary relationship between the innovation ability and positioning of various enterprises, and its corresponding common financial needs are very prominent. Explore and improve the characteristics of the needs of the two, the combination of standardization and personalization of science and technology financial products and services, promote multi-party cooperation in the industrial chain financial innovation, on the basis of promoting the "three-chain synergy" of scientific and technological innovation research and development chain, industrial chain and market chain, and strive to achieve the synergy of scientific and technological innovation chain, achievement transformation chain and financial capital chain.
Vigorously develop digital technology and finance, and realize the deep integration of science and technology and finance. On the one hand, accelerate the digital transformation of the financial industry, make the banking, first-class industry, and insurance industry actively apply new technologies to comprehensively improve business models, support comprehensive cooperation between technology-based enterprises and financial institutions on the basis of compliance, and provide more application scenarios and demand momentum for scientific and technological innovation. On the other hand, we should make full use of data elements and new technologies to improve various financial services and products, which not only improves the efficiency of financial resource allocation in a general sense, promotes the coordinated development of inclusive finance, science and technology finance, and green finance, but also empowers technology for science and technology financial products in a special sense, and alleviates the inherent problems in cost, information and efficiency.
The above is slightly abridged from |People's Tribune magazine November (II) original title |The development direction and innovative exploration of science and technology finance in China.
Author |Yang Tao, director, researcher and doctoral supervisor of the Industrial Finance Research Base of the Chinese Academy of Social Sciences.
NewEdit |Zhao Guangju.
New**American Editor|Xie Shuai.
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