China has launched its first batch of science and technology innovation bonds, marking a significant move to boost innovation through the bond market.
On Friday, eight firms showcased their sci-tech innovation bonds at a roadshow held at the Beijing Financial Assets Exchange. This event signified the inauguration of China's "sci-tech board" within its bond market.
The "sci-tech board" aims to provide financial institutions, technology enterprises, and equity investment funds with new opportunities to issue bonds that support scientific and technological innovation. Pan Gongsheng, governor of the People's Bank of China (PBOC), highlighted the initiative's goal to facilitate innovation in the sector.
According to a notice from the PBOC, these bonds include corporate bonds, enterprise bonds, and debt financing instruments issued by non-financial enterprises. Issuers are encouraged to adopt flexible bond terms and issue longer-maturity bonds to better align with the funding needs in the field of sci-tech innovation.
"Technology-driven enterprises must stay committed to innovation, which requires long cycles, cost-effective solutions, and a variety of financial tools," said Duan Dawei, senior vice president of iFLYTEK Co., Ltd. "The 'sci-tech board' is flexible to align with the financing needs of tech companies, enriching the types of financial support tools."
Nearly 100 market institutions are preparing to issue more than 300 billion yuan (about $41.7 billion) worth of sci-tech innovation bonds, with further participation expected in the future, according to the PBOC.
