China’s capital market shows expanding support for internet sector

BEIJING — China's top securities regulator emphasized the role of capital market in supporting the country's internet companies, said an official in a forum on financial capital and internet technology innovation.

Fang Xinghai, vice-chairman of the China Securities Regulatory Commission (CSRC), said the difficulties of applying for initial public offerings (IPOs), which plagued enterprises for many years, have been resolved, with time for IPO approval drastically shrinking from three years to less than nine months.

More than 500 enterprises raised about 355.4 billion yuan (about $51 billion) through IPOs from 2017 to October 2018, said Fang.

The securities regulator also pushed forward mergers and acquisitions (M&A), mainly between upstream and downstream companies of the same industry in a bid to achieve industrial improvement through reorganization.

China's securities market saw 5,765 M&A from 2017 to September 2018, with transactions reaching 3.67 trillion yuan, according to the CSRC.

The commission also encouraged micro, small- and medium-sized enterprises to debut on China's National Equities Exchange and Quotations (NEEQ), also known as the "new third board," which aims to support innovative and fast-growing enterprises.

Qualified companies in China can make listing application for NEEQ through brokerage firms, with no restriction on their ownership, industries and profitability.

From 2017 to September 2018, NEEQ-listed companies raised about 181.2 billion yuan through issuing shares, CSRC data showed.

Companies can also raise money via the bond market of bourses, said Fang.

The commission rolled out pilot bonds for innovative technology companies in 2016. More than 40 pilot bonds have been issued, raising 6.5 billion yuan by September.

CSRC also established partnership with the securities regulators of nearby markets such as Singapore to provide convenience for enterprises to raise fund in overseas markets, Fang added.