The evolution of productivity is undergoing a significant shift through technological innovation, redefining the landscape of modern industry systemsCapital markets play a crucial role in this paradigm transformation by distributing innovation risks, facilitating the formation of innovative capital, and optimizing the allocation of resourcesThis environment not only offers fertile ground for high-quality enterprises that epitomize a new era of productivity but also enhances investors' opportunities to partake in the fruits of high-quality economic growth.

According to Gao Ruidong, Chief Economist at Everbright Securities, the capital market has become a prominent arena for fostering this new class of productivityHe anticipates a further alignment of capital influx towards sectors that represent this innovative productivity, thereby boosting institutional inclusivity, augmenting resource allocation capabilities, and ultimately, supporting technological advancements and industrial upgrades.

The movement of resources towards innovation is driven by multifaceted tools aimed at fostering growth

The active capital market serves as the nexus connecting finance, technology, and industry, directly influencing the efficiency with which new productivity is nurturedRegulatory bodies have introduced initiatives throughout the year—such as “Sixteen Measures for Innovation,” “Eight Measures for the Sci-Tech Board,” and “Six Measures for Mergers and Acquisitions”—which have enhanced the adaptability and inclusivity of capital market regulations, thereby promoting the concentration of premium resources in sectors characterized by new productivity.

The trend towards resource concentration in the mergers and acquisitions market is particularly pronouncedThis year alone, there have been approximately 3,000 M&A transactions across the boardFollowing the introduction of the “Six Measures for Mergers and Acquisitions” in September, over 260 listed companies have disclosed asset restructuring efforts, indicating a focus on emerging industries as prime targets for acquisitions.

For instance, companies like Goodix Technology plan to acquire control over Cloud Eagle Valley, while GigaDevice Semiconductor intends to jointly acquire 70% shares of Suzhou Saixin Capital alongside partners like Shixi Capital

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Additionally, Xidi Micro plans to purchase 100% of Chengxin Micro while raising accompanying fundsThese examples encapsulate the surge of M&A activity as companies seek horizontal integration and strategic realignment, targeting entities with core technologies and innovative capabilities to optimize their industrial chains and expand their business horizonsThe presence of smaller companies alongside industry giants in this wave of mergers and restructurings showcases a notable characteristic of the current market dynamics.

Beyond the M&A domain, regulatory authorities are also strategically channeling funding toward the innovation-driven sectorsAs of December 17, over 80 newly listed enterprises this year are associated with strategic emerging industries, comprising more than 80% of the totalThe establishment of a multi-tiered capital market framework has provided a nurturing environment for the development of new productivity, with continuous enhancements in service coverage and precision

Companies linked to strategic emerging industries are predominantly listed on platforms such as the Sci-Tech Innovation Board, the Growth Enterprise Market, and the Beijing Stock Exchange.

Weiqi Jia, Director of the Industry Economic Research Office at the National Information Center, advocates for the refinement of the multi-layered capital market system to further attract capital towards technology and innovationShe suggests broadening and smoothing the equity financing channels for innovative enterprises, optimizing the conditions for stock exchanges, and lowering the thresholds for tech-based companies aligned with new productivity cultivation, thereby improving efficiency and supporting their funding needs at various development stages through methods such as initial public offerings, capital increases, and share placements.

The bond market also plays an instrumental role in underpinning technological innovation and bolstering new productivity development

A recent highlight of this domain is the successful issuance of China Railway Signal & Communication Corporation's innovative perpetual bonds, representing the first such corporate bond issued by a state-owned enterprise on the Sci-Tech Innovation BoardThe organization aims to raise nearly 25 billion yuan through these bonds for debt repayment purposes.

This issuance signifies the rapid ascent of innovation-focused bonds, which officially launched in May 2022 upon the release of guidelines by the Shanghai and Shenzhen exchangesThese guidelines aimed to enhance direct financing channels for innovative technology companies and establish a sound framework within the bond market for supporting innovation.

Under the ongoing guidance of regulatory bodies over the past two years, both the quantity and scale of innovation bonds have surged; as of now, 491 such bonds have been issued since the beginning of 2024, collectively raising over 560 billion yuan

The issuance is predominantly led by financially robust state-owned enterprises, with a heightened focus on raising funds for technological innovation and industrial transformation.

Throughout the bond market, researchers like Zhou Maohua from Everbright Bank highlight the sustained efforts by regulators to optimize mechanisms that serve innovative enterprises, improve issuance conditions, and bolster efficiencyThis dynamic has spurred financial institutions to innovate their product offerings in alignment with the funding requirements of innovative firms, transitioning the innovation bond market into a versatile solution catering to diverse financing needs across varying stages of enterprise lifecycles and ultimately aiding technological progress and industrial upgrades.

Publicly listed companies stand as paragons of China’s elite enterprise groups, constituting a vital microeconomic foundation for high-quality development and acting as a significant source of investment value within capital markets

This year has seen a suite of policies launched by regulators aimed at elevating the quality of listed companies while bolstering investor confidenceOn one hand, new regulations regarding market valuation management mandate companies maximize their operational efficiency and profitability, while also legally and compliantly employing mechanisms like stock options, employee stock ownership plans, cash dividends, investor relations management, information disclosure, and share buybacks, all geared towards responsibly reflecting their investment value.

Additionally, efforts to regularly engage with listed companies have intensified, with dialogue sessions held to gather feedback, ensuring that companies' real-world challenges are addressedThis initiative is not only about identifying and overcoming business obstacles but also about establishing a robust feedback mechanism for quality companies that promotes high standards of operational governance and cultivates shareholder rights, enhancing investor satisfaction.

Under the supportive umbrella of these multifaceted policies, the cumulative amounts associated with stock buybacks and cash dividends have reached historic peaks, indicating a rising number of companies opting for specialized loans to facilitate buybacks and increases in stakeholder ownership