China Launches Own NASDAQ-Style Sci-Tech Innovation Board

China officially inaugurated its highly anticipated science and technology innovation board at the Shanghai Stock Exchange (SSE) on June 13, a milestone in the country’s capital market development. The new “STAR Market” board aims to emulate the tech-heavy Nasdaq in the United States.

STAR is the first submarket of China’s capital market to adopt the registration-based initial public offering (IPO) system to facilitate companies’ fundraising. Huang Hongyuan, chairman of the SSE, said that companies will be traded on the STAR Market board within two months.

“We will fully enforce a share offering system that is based on information disclosure, supporting the growth of technology firms to make breakthroughs in innovations in core technologies,” said Yi Huiman, chairman of the CSRC, at the launch.

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The board is meant to encourage investment in domestic tech innovators, ensuring they have resources to develop, as well as an incentive to list domestically. Trading in these companies will also become easier for mainland investors, following complaints that Chinese top guns like Alibaba chose to list in the U.S. rather than at home.

The board is designed to focus on companies in the high-tech and strategic emerging sectors such as new-generation information technology, advanced equipment, new materials, new energy, environmental protection, and biomedicine, according to the top securities regulator.

As of June 10, the SSE had handled 119 applications for IPOs on the sci-tech innovation board. Most of the applying companies were in the field of new-generation information technology, advanced equipment industry, and biomedicine.

Featured photo credit to Zhang Hengwei/China News Service