China’s securities regulator has pledged to increase financial support for technology firms in artificial intelligence (AI) and aerospace sectors. The focus will be on aiding companies that have achieved significant advancements in core technologies, including assistance with stock market listings.
The China Securities Regulatory Commission (CSRC) introduced 18 measures as part of a plan to boost the capital market in five areas: tech finance, green finance, inclusive finance, pension finance, and digital finance.
The plan includes issuing real estate investment trusts (REITs) for new infrastructure projects such as AI, data centres, smart cities, and industrial parks focused on tech innovation. It also aims to support the digital upgrade of traditional infrastructure.
The action plan highlights efforts to expand green financial product offerings, improve access to inclusive finance, and develop diversified pension financial products. According to CSRC spokesperson Zhou Xiaozhou, it also emphasizes building systems to foster innovation, strengthen the adaptability of capital markets, and improve resource allocation to aid China’s modernization efforts.
China’s stock markets saw gains on Friday. The Shanghai Composite Index climbed 1.01% to 3,303.67 points, while the Shenzhen Component Index rose 1.75% to 10,576 points.
The ChiNext Index, which tracks growth enterprises, increased by 2.53% to close at 2,174.35 points. The combined turnover for the two major indices grew to 1.96 trillion yuan ($273.37 billion), up from 1.55 trillion yuan the previous day. Stocks in the electronic information and medical equipment sectors led the rally.
Goldman Sachs has projected a 14% year-on-year gain for the MSCI China Index by the end of 2025, with potential gains reaching up to 28%. A recent note highlighted that technology advancements, such as the launch of AI models like DeepSeek R1, demonstrate the competitiveness of Chinese tech companies.
These developments will narrow the valuation gap between the top US and Chinese tech and semiconductor stocks.
A Yun, deputy general manager at Schroders Fund Management, noted that Chinese equity valuations remain attractive. He also pointed to stable economic fundamentals and growth potential for Chinese assets in global investment portfolios.
China is increasing efforts to attract long-term investments into the capital market to enhance stability and investor confidence. On January 22, financial authorities presented a plan to encourage medium- and long-term funds to support stock performance.
Yang Delong, chief economist at First Seafront Fund, told the Global Times that increased policy support will help rebuild investor confidence and drive more household savings into the capital market, which will, he said, bring additional funds into the system.
By early 2025, sectors like AI and humanoid robots have become key drivers in the A-share market. Yang suggested that the market could outperform many investors’ expectations in the coming years.
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