China is ramping up efforts to assist high-quality small and medium-sized enterprises (SMEs) in accessing capital markets, particularly through the Beijing Stock Exchange and the “new third board.” These platforms, designed to support SME financing, are at the center of a new strategic cooperation between the Beijing Stock Exchange, the Ministry of Industry and Information Technology (MIIT), and the National Equities Exchange and Quotations.

This collaboration, announced at the Annual Conference of the Financial Street Forum 2024, aims to foster institutional synergy and enhance the development of innovative SMEs. The partners are focusing on improving coordination in areas such as company cultivation, regulatory framework alignment, and efficient use of capital market tools like mergers, acquisitions, and equity incentives.

Currently, China is home to over 141,000 specialized and innovative SMEs, including 14,600 "little giant" firms recognized for their advanced technologies and unique products. These enterprises are pivotal in driving the country's economic modernization and technological advancement.

A significant proportion of the funds raised by companies listed on the Beijing Stock Exchange are directed toward key sectors such as green energy, digital economy, high-end manufacturing, and new materials. High-tech enterprises account for over 90% of the listed firms, while companies in strategic emerging industries and advanced manufacturing make up nearly 80%. Over half of these are recognized as “little giant” enterprises, with several earning national accolades like the "Single Champion" award and the National Science and Technology Progress Award.

In recent years, the Beijing Stock Exchange has played a crucial role in creating a bridge for innovative SMEs to access both capital and opportunities for growth. Its inclusive and targeted policies are designed to support companies specializing in cutting-edge technologies and sustainable practices, making it an essential force in fostering high-quality productivity.

Earlier this month, Vice Minister of Industry and Information Technology Wang Jiangping announced that China's 141,000 innovative SMEs are central to the country’s new industrialization efforts. To further enhance capital market access for these firms, MIIT and the China Securities Regulatory Commission are launching a third regional equity market dedicated to SMEs with specialized, high-tech offerings.

The Beijing Stock Exchange’s emphasis on supporting these "little giant" companies underscores its broader mission to promote inclusive finance within the capital markets. By fostering a financial ecosystem that encourages investment in high-tech and green industries, the exchange is helping to cultivate clusters of high-quality productivity.

Notably, nearly 600 listed companies on the Beijing Stock Exchange and the New Third Board hail from county-level regions, and over 200 are located in ethnic minority areas. These enterprises are vital in driving local economic transformation and job creation. With a median price-to-earnings ratio of 17 times and average financing of 200 million yuan, the exchange has facilitated cumulative financing of 53 billion yuan across 252 SMEs.

The Beijing Stock Exchange is also encouraging intermediary organizations to support SMEs by aligning incentives through scoring systems that reward firms investing in early-stage, small, and tech-focused enterprises. This collaborative approach, bringing together government entities, financial institutions, and investors, is crucial in ensuring that innovative SMEs thrive alongside China's rapid economic evolution.