Driving the economy to continue to rebound and improve, the good news is here! The Executive Meeting of the State Council has proposed a series of policy measures, including capital markets and the economy

According to CCTV News, the State Council executive meeting held on June 16th discussed a series of policy measures to promote sustained economic recovery and improvement. The action plan to increase support for financing of technology-based enterprises and the Regulations on the Supervision and Administration of Private Investment Funds were reviewed and approved, and the Degree Law of the People's Republic of China was discussed.

Figure: News broadcast

Key points overview:

A series of policy measures have been proposed in four aspects: increasing macroeconomic policy regulation, focusing on expanding effective demand, strengthening and optimizing the real economy, and preventing and resolving risks in key areas

Give top priority to supporting start-up technology-based enterprises, and accelerate the formation of a financial service support system that focuses on equity investment and is linked with "stock loan debt protection"

Strictly crack down on illegal financial activities such as illegal fundraising under the name of "private equity funds"

Take more powerful measures

Promoting sustained economic recovery and improvement

The meeting pointed out that the overall economic operation of China is currently recovering and improving. With the introduction and implementation of early policy measures, market demand is gradually recovering, production and supply continue to increase, prices and employment are generally stable, and high-quality development is steadily advancing. At the same time, the external environment is becoming more complex and severe, and global trade and investment are slowing down, directly affecting the process of China's economic recovery. In response to changes in the economic situation, more powerful measures must be taken to enhance development momentum, optimize economic structure, and promote sustained economic recovery and improvement.

The meeting focused on four aspects: increasing macroeconomic policy regulation, focusing on expanding effective demand, strengthening and optimizing the real economy, and preventing and resolving risks in key areas. A series of policy measures were studied and proposed. The meeting emphasized that policy measures that meet the conditions should be timely introduced and implemented, while strengthening the reserve of policy measures to maximize the comprehensive effect of policies.

In terms of increasing macroeconomic policy regulation, the recently linked reduction of policy interest rates has signaled an increase in countercyclical adjustment efforts. Several experts believe that after the "interest rate cut", a combination of economic stabilization policies is expected to be introduced.

Make supporting start-ups of technology-based enterprises a top priority

The meeting reviewed and approved the "Action Plan for Strengthening Support for Financing of Technology based Enterprises", emphasizing the guidance of financial institutions to further optimize product, market, and service systems based on the different needs of technology based enterprises at different stages, and provide diversified relay financial services for technology based enterprises throughout their entire life cycle. We should prioritize supporting start-ups of technology-based enterprises and accelerate the formation of a financial service support system that focuses on equity investment and combines stock loans with debt protection.

In the view of experts, the capital market has inherent advantages in serving high-level technological self-reliance and self-improvement, and is an important hub for promoting a virtuous cycle of "technology industry finance". The issuance of the Action Plan to Intensify Support for Financing of Technology based Enterprises will further assist science and technology innovation enterprises in utilizing the capital market to become better and stronger, promoting a virtuous cycle of "technology industry finance".

Thanks to the nourishment of the capital market, a group of leading enterprises that have broken foreign monopolies and strong independent innovation capabilities have successfully gone public. At present, among more than 5000 A-share listed companies, more than half of them are listed in strategic emerging industries, and the market value of the high-tech industry has increased from about 20% in early 2017 to nearly 40%. In 2022, the R&D investment of listed companies accounted for more than half of the national R&D expenditure, and the R&D intensity of high-tech manufacturing listed companies significantly led the national average. The cumulative number of patents disclosed by listed companies accounted for nearly one-third of the national patent number.

"The capital market will help science and technology innovation enterprises grow and strengthen by leveraging its resource allocation function, accelerating industrial transformation and upgrading, and effectively promoting the high integration of industrial and capital chains." Li Zhan, Chief Economist of China Merchants Fund, said that a regulatory and market ecosystem that serves high-level technology self-reliance and self-reliance is gradually forming.

Severe crackdown on private equity funds

Illegal financial activities such as illegal fundraising

The meeting reviewed and approved the Regulations on the Supervision and Administration of Private Investment Funds.

The meeting pointed out that in recent years, China's private equity investment fund industry has developed rapidly and played a positive role in serving the real economy, supporting entrepreneurship and innovation, and other aspects.

Developing specialized administrative regulations to regulate private equity investment fund business activities on a legal and standardized track is conducive to better protecting the legitimate rights and interests of investors and promoting the standardized and healthy development of the industry.

We need to strengthen control at the source of prominent issues in the industry, set regulatory bottom lines, and severely crack down on illegal financial activities such as illegal fundraising under the name of private equity funds.

We need to strengthen the coordination and coordination of supervision and development policies, implement differentiated supervision on different types of private investment funds, especially venture capital funds, and promptly introduce specific policies to promote the development of venture capital funds.