Tech-focused market meant to pioneer reform of IPO reviews

The highly anticipated launch of the Shanghai Stock Exchange's tech-focused STAR Market last week heralds essential reform of China's capital market as the country undergoes an economic transformation driven by scientific and technological innovation.

President Xi Jinping announced in November that a new tech board with a pilot registration-based initial public offering system would be launched at the Shanghai Stock Exchange. Preparatory work then proceeded efficiently and the first three companies passed review by the Shanghai exchange on June 5.

This week, HYC Technology, a manufacturer of automatic detection equipment for industrial applications that is based in Suzhou, Jiangsu province, became the first company to start the IPO process for the new tech board, the Shanghai exchange said on Wednesday.

The company, which counts Apple, Samsung and LG among its clients, received final approval for its IPO just eight days after the exchange completed the review of its application.

The official launch of the STAR Market－a Nasdaq-like science and technology innovation board－on June 13, was one of the highlights of this year's Lujiazui Forum, an annual event in Shanghai in which government officials, financial experts and leaders gather to discuss and foster international financial cooperation and further the reform and opening-up of China.

This year's forum, the 11th, had "promoting high-quality economic growth" as one of its themes, and the launch of the new tech board is part of that effort. According to regulations released by the China Securities Regulatory Commission in late January, the new board will mainly focus on six high-tech and strategically important emerging industries: new-age information technology, high-end equipment, new materials, new energy, environmental protection and biomedicine.

Vice-Premier Liu He said at the forum's opening ceremony that the ultimate goal of introducing the STAR Market is to allow the capital market to help nurture more companies involved in scientific and technological innovation, which, in the long run, will help China realize its economic transformation.

As the Government Work Report, released in early March, said, new economic drivers in China, represented by large scientific projects, transformation of traditional industries and flourishing startups, are profoundly changing the ways of production and life, and honing a new competitive edge for the country.