Jul 22, 2019 Business & Finance Comments Off on STAR market to become new incubator of Chinese innovations
China's new Nasdaqstyle tech board, the STAR market, which started trading on Monday, is expected to become a new catalyst of the country's science and technology innovation. Meanwhile, China's capital market sees a new milestone toward greater openness, transparency and efficiency.
The first batch of 25 companies, involving biology and medicine, semiconductor, new energy and other emerging industries, debuted at the STAR market on the Shanghai Stock Exchange. What distinguishes the new board from its peers in China's capital market include that companies must abide by the high standards on research and development investment and may face more regular delisting due to the pilot registrationbased IPO system. In addition, a bigger daily limit on the price rise or decline is set, which means bigger price fluctuations.
These underline the scitech essence of the STAR market, and the new board is expected to become a catalyst of science and technology innovation in China. The muchanticipated new board has been launched at a time when the United States intensified efforts to block China's technological development. Though the socalled decoupling of the world's two largest economies is unlikely to happen, China finds it necessary to reduce dependence on the United States in key technologies. The STAR market comes at a right time.
The new board also lowers the threshold for listings in the capital market, providing a muchneeded channel for emerging companies to raise capital more efficiently. For years, many Chinese companies, especially startups, have been listed abroad. Now it is time to lure them back.
China's capital market is developing fast, but it is still young and far from perfect. The Chinese authority has never stopped making efforts to improve the mechanism. The debut of the STAR market will allow the market to play a fundamental role in allocating resources, which is critical to China's goal of seeking highquality development.
Source: Xinhua Finance Agency
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