China eyes ‘substantial economic impact’ from hi-tech innovation as regulators vow more support for industry

China’s major financial regulators are rallying support to turn the nation’s tech industry into a bigger player in the economy, signalling that technology and innovation will remain high on the government’s agenda in the coming year.

“We need to put our full-fledged support behind the strategy to drive innovation, and to put more financial resources toward boosting tech innovation,” a post-meeting statement said on Wednesday, adding that authorities also need to “pay attention to shortcomings in the current financial services sector”.

The statement noted that representatives from more than two dozen banks and insurance companies attended the meeting with national and provincial regulators, and it was decided that financial institutions would help improve the fintech industry.

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Last month, during China’s twice-a-decade financial policy conference, “technology and innovation” were identified as one of five areas that are in need of more financial support.

After Monday’s meeting, financial regulators said they would make it easier to obtain loans and financing for hi-tech manufacturing, specialised corporations and small and medium-sized tech enterprises.

Similar directives were also highlighted at a municipal financial regulator meeting in Shanghai on Tuesday, when local officials pledged to “build a cooperative and open ecosystem for fintech”, and to provide enough support for innovation and technology to make them essential to China’s economic development.

More than 60 firms have raised more than 140 billion yuan (US$19.6 billion) via initial public offerings through the Shanghai Stock Exchange’s Science and Technology Innovation Board this year.

He Jun, a senior researcher with a focus on Chinese technology and the economy at Beijing-based Anbound Consulting, said there would be more supportive policies launched for tech and innovation in the short term as China pushes for “high-quality development”.

“There will not only be financial and monetary policies that help support tech companies in the industry – I expect there to also be policies for research and development of the tech sector,” He said.

Peng Peng, executive chairman at the Guangdong Society of Reform, said that regardless of geopolitics with the US, China has set off on a path toward “becoming a leading tech power”.

Nonetheless, he added, China “would be open to cooperation with other countries”.