now loading...
China has been strengthening its technological capabilities for years. With the rapid development of artificial intelligence ( AI ), the country is increasing its support for the long-term growth of technology companies in this field.
Funding is essential, and authorities have introduced measures to support these enterprises in raising capital. These include relaxing listing requirements for tech firms on the Shanghai Stock Exchange, encouraging the issuance of sci-tech innovation bonds to diversify their financing channels, and providing direct investment via government funds.
STAR Market listings
In March 2025, the Shanghai Stock Exchange reinstated the so-called fifth listing standard for its tech-focused STAR Market. This allows companies with a market capitalization of at least 4 billion yuan ( US$557.57 million ) to apply for listing, even if they have not yet turned a profit. This standard primarily targets companies with complex technologies, high capital requirements, and long R&D cycles.
In June, during the Lujiazui Forum, China Securities Regulatory Commission ( CSRC ) chairman Wu Qing unveiled a new “1+6” reform plan to further develop the STAR Market. The “1” refers to the reopening of the fifth listing standard for unprofitable companies, while the “6” consists of six supporting measures, namely:
The use of the fifth listing standard had largely stalled. Among those attempting to go public under this standard in 2023, more than 60% failed due to such factors as unsuccessful R&D and weakening market demand. A key obstacle was the increasingly stringent regulatory criteria for identifying “critical and core technologies”. Regulators required companies to provide national-level research endorsements or industry validation to demonstrate that they possessed core competitiveness and growth potential.
Currently, 20 companies have gone public under the fifth standard – all of which are biopharmaceutical firms. Together, these IPOs have raised a total of 42.87 billion yuan. With the latest CSRC announcement, tech firms other than biopharmaceutical companies will have greater access to financing channels and investors will gain more exposure to emerging firms.
Chinese GPU ( graphics processing unit ) companies are grabbing the opportunity to go public under the fifth standard. For example, Moore Threads has completed its pre-IPO compliance counselling and submitted an IPO application to the Shanghai Stock Exchange on June 30. A successful listing will make it the first GPU stock in China. The company positions itself as a full-featured GPU firm, expanding into areas such as AI computing, cloud computing, and personal intelligent computing. Founded in 2020, the company boasts a senior management team that includes former Nvidia executives. It is currently valued at 24.62 billion yuan, according to its IPO prospectus.
MetaX, another Chinese GPU company, submitted its IPO application on the same day. After a recent external equity financing, it is valued at 21.07 billion yuan.
Both start-ups are currently unprofitable, having incurred substantial R&D costs. From 2022 to 2024, Moore Threads reported a cumulative loss of 5 billion yuan, while MetaX recorded 3.06 billion yuan in losses. During the period, the companies invested heavily in R&D – 3.81 billion yuan for Moore Threads and 2.2 billion yuan for MetaX, representing 626% and 282% of their respective revenues.
Despite being soaked in red ink, both companies demonstrate strong capabilities in GPU and AI chip development. Their revenues are growing rapidly, and gross margins are steadily improving, indicating promising growth potential.
Moore Threads posted revenues of 46 million yuan in 2022, 124 million yuan in 2023, and 438 million yuan in 2024, achieving a compound annual growth rate ( CAGR ) of 208.6%. MetaX generated revenues of 426,400 yuan in 2022, 53.02 million yuan in 2023, and 743.07 million yuan in 2024, with an impressive CAGR of 4,074.5%.
Sci-tech innovation bonds
Apart from policy support in the IPO market, the bond market is another channel for Chinese companies to obtain long-term financing. In May 2025, the People’s Bank of China and the CSRC jointly announced support for the issuance of sci-tech innovation bonds, encouraging financial institutions, technology enterprises, private equity, and venture capital firms to issue such bonds. The policy allows flexible bond term design, promotes the issuance of long-tenor bonds to align with the funding needs of the tech sector, simplifies disclosure requirements, and encourages local governments to provide interest subsidies or guarantees.
As of June 7, within the first month of the programme’s launch, 147 institutions had collectively issued 374.8 billion yuan of sci-tech innovation bonds. This includes 223.9 billion yuan ( US$31.21 billion ) from 39 financial institutions and 151 billion yuan ( US$21.05 billion ) from 108 non-financial enterprises, according to the National Association of Financial Market Institutional Investors.
In May 2025, the Bank of China issued 20 billion yuan of sci-tech innovation bonds. The bond has a three-year maturity and a coupon rate of 1.65%. Proceeds from the issuance will be used to provide loans and financing to the technology innovation sector.
Beyond banks, 17 privately-owned enterprises have also issued sci-tech innovation bonds. Among them is iFLYTEK, a Shenzhen-listed company specializing in voice recognition and AI technologies. Its maiden issuance totalled 800 million yuan with a three-year tenor. While iFLYTEK previously relied heavily on equity financing, this move marks a shift toward long-term capital to optimize its debt structure. Earlier, the company issued two rounds of sci-tech innovation notes, one for 100 million yuan with a 30-day duration and the other raising 200 million yuan with a 158-day tenor.
Notably, 60% of the sci-tech innovation bonds issued had medium- to long-term maturities ( over one year ). This includes seven bonds with maturities over 10 years, totalling 8.36 billion yuan. All bonds issued by equity investment institutions had maturities ranging from three to 20 years.
Government direct investment
In January 2025, the government launched the Hangzhou AI Industry Chain High-Quality Development Action Plan, aiming to invest over 300 billion yuan in computing power, large language model ( LLM ) technologies, and AI applications.
Hangzhou, the capital of Zhejiang Province, is positioning itself as a hub for tech start-ups, with a focus on the “Six Little Dragons of Hangzhou”, comprising Game Science, DeepSeek, Unitree Robotics, DEEP Robotics, BrainCo, and Manycore Tech.
The primary source of capital for these six tech firms is Hangzhou State-owned Capital Investment and Operation Co., Ltd., which manages the Hangzhou Sci-Tech Innovation Fund and the Hangzhou Innovation Fund. It has so far invested in four of the six companies: DEEP Robotics, Unitree Robotics, BrainCo, and DeepSeek.
