China is gearing up domestic savings to technology companies

Beijing is gearing up to channel billions of dollars’ worth of domestic savings to China’s technology companies via a new stock exchange modelled on the US’s Nasdaq, as the sector grapples with slowing venture capital funding and a trade war with the US. More than 100 tech companies ranging from artificial intelligence software developers to biotech and microchip makers have applied to list on the Shanghai technology board, aiming to raise a combined $16 billion. By comparison, IPOs on Shanghai’s main board last year raised $11.7 billion… Beijing hopes the Star board, which is set to launch within weeks, will tempt fast-growing start-ups to choose it over Nasdaq by offering them the chance to gain highervaluations, while also giving China’s vast asset management industry an alternative to the financial and industrial stocks that dominate the country’s main Shanghai and Shenzhen exchanges. Unlike these boards, the new stock exchange will also allow short selling. Itsestablishment was announced in November, by China’s president Xi Jinping… Private valuations for Chinese tech start-ups have risen rapidly in recent years thanks to venture capital funding, and the country now boasts 100 “unicorns”, private companies valued at more than $1 billion.

Tom Hancock, Wang Xueqiao and Henny Sender