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A bilingual sign for the Annual Conference of Financial Street Forum 2024 is displayed on Beijing Financial Street on October 18, 2024. Photo: Courtesy of Financial Street Forum

Equity investment in China is set to usher in greater development opportunities, as it aligns closely with the development of new quality productive forces and plays a crucial role in boosting the commercialization of technological outcomes, nurturing innovative firms, and contributing to industrial upgrading, Jiang Tiejun, deputy director with the Equity Management Department of the National Council for Social Security Fund, said on Friday.

The development of equity investment has a sound policy environment, Jiang said at the Annual Conference of Financial Street Forum 2024 held in Beijing.

A meeting by the Political Bureau of the Communist Party of China Central Committee held in April emphasized efforts to actively develop venture capital and enhance patient capital, the Xinhua News Agency reported. 

In a guideline on the capital market released in April, the State Council said that work will be done to develop public equity funds and optimize the policy environment for insurance-fund investment.

"Since September, China's central government has rolled out incremental policies to support upward economic growth and optimize the economic structure. Thanks to the implementation of these policies, market confidence has been greatly elevated, with notable increase in market vitality," Jiang said, noting that the development trend continues to improve.

While the Chinese economy enters the phase of high-quality development, it presents more high-quality investment opportunities for equity investors, Jiang said.

On the one hand, a large number of innovative outcomes and tech firms are expected to emerge alongside the development of new quality productive forces, which will drive the sustained growth of venture capital and entrepreneurship investments. On the other hand, by setting up merger and acquisition funds, equity investments could help accelerate industrial integration, according to Jiang.

Amid a relatively low interest rate environment, investors place greater importance to the share of equity assets, Jiang said.

On Friday, Li Yunze, head of the National Financial Regulatory Administration (NFRA), stressed the need to intensify the cultivation of patient capital and promote the development of new, high-quality productive forces, according to Xinhua. 

The NFRA will also support qualified insurance institutions to set up new private equity investment funds, Li added.

An equity investment is generally medium and long-term capital that is invested in a company by purchasing shares of that company in the stock market. On September 24, the NFRA announced the expansion of the pilot program for equity investments by financial asset management companies.

According to a circular issued by the administration, the pilot program will now extend beyond Shanghai to include 17 other cities, including Beijing, North China's Tianjin and Southwest China's Chongqing.

Since 2020, financial asset management firms established by major commercial banks have been conducting equity investment pilots in Shanghai.

At the same time, NFRA said that it will collaborate with relevant departments to summarize experiences, optimize supporting policies, and further explore the expansion of pilot cities, ensuring that pilot programs yield tangible results.