At the Pujiang Innovation Forum in 2024, a series of special forums were held on the topic of technology finance. Industrial and Commercial Bank of China (ICBC) Shanghai Branch has already established a full-process financial solution from 0 to 100 for technology finance services, providing services for the full cycle of growth for technology and innovation companies.
In the Pujiang Innovation Forum in 2024, a series of special forums were held on the topic of technology finance. The focus is on doing well in technology finance, with a focus on early investment, small investment, long-term investment, and investment in hard technology. It aims to build a financial service system for technology companies that covers the entire chain and life cycle, to promote the mutual supply of technology demand and financial support.
From scientific research to commercialization and industrial development, financial support is crucial at every step. As an important participant in technology finance services, Zhou Jie, Deputy General Manager of China Construction Bank (CCB) Shanghai Branch, was interviewed by reporters from the Science and Technology Innovation Broad on the afternoon of the conference day.
Building a full-process financial solution from 0 to 100.
Zhou Jie stated that, by coordinating the use of equity, credit, bonds, and insurance, ICBC Shanghai Branch provides technology companies with a full-chain, full-function, and full-life-cycle financial service. It invests more financial resources in early stages, small and medium-sized companies, long-term projects, and hard technology, in order to support the upgrading of Shanghai as a global center for technology and innovation. This promotes a virtuous cycle of "technology-industry-finance".
Regarding policy support, according to Zhou Jie, since 2023, ICBC Shanghai Branch has been dedicated to providing comprehensive financial services for various types of technology and innovation entities. In 2023, it introduced the "Financial Solutions for Supporting Technology and Innovation from 0 to 10", which includes financing solutions for different stages of technology development and risk characteristics. The solutions are designed based on the perspectives of technology producers, technology users, capital providers, and service providers, focusing on the stages of technology production, transaction, and usage. Additionally, comprehensive service plans are provided to better serve early-stage technological innovation and the commercialization of achievements.
Also in 2023, ICBC Shanghai Branch designed the "Jian-Hu Chain" comprehensive service plan for technology industry finance, covering 7 categories and 40 products and services. Under the brand of "Jian-Hu Chain," the "Seven-Chain" plan was launched to build a "technology and innovation eco-cycle" that promotes innovation development, industrial agglomeration, smooth supply, data credibility, fund alliance, entrepreneurial services, and talent empowerment.
This year, ICBC Shanghai Branch upgraded its service plan again and launched the "Jian-Hu Chain" technology industry finance "Stock Loan-Bond Insurance" linkage plan. It collaborates with major equity direct investment institutions, private equity institutions, industrial investment institutions, securities companies, insurance companies, guarantee institutions, ICBC Group's subsidiary companies (investment, trust, fund, insurance), and investment service institutions. Through the synergy of stock loans, bonds, and insurance, it meets the comprehensive financial needs of technology and innovation entities for technology innovation, achievement transformation, and industrial development.
In April this year, the Shanghai Branch of China Construction Bank also launched the "Financial Service Plan to Give Full Play to the Comprehensive Hub Function of Commercial Bank Technology Finance", aiming to provide full-lifecycle financial support for innovative startups, accelerated development of mature technology enterprises, and transformation and upgrading of mature technology enterprises. It includes various forms such as investing before lending, lending before investing, and concurrent investing and lending. It also includes external credit enhancement through investment, financing guarantees, risk compensation, as well as self-credit enhancement by technology innovation entities, and the coordination of stocks, loans, bonds, and insurance to meet the financing needs of technology innovation, result transformation, and industrial development.
"Through the introduction of a series of the above-mentioned plans, the Shanghai Branch of China Construction Bank has basically developed a full-process financial solution for '0 to 1' technological innovation, '1 to 10' transformation, and '10 to 100' industrialization. It can provide comprehensive financial services for innovative startups, accelerated development of mature technology enterprises, transformation and upgrading of mature technology enterprises, as well as innovation sources of technology talent, scientific research institutions, technology parks, and business incubators." said Zhou Jie.
As of the end of July 2024, the balance of technology enterprise loans in the Shanghai Branch of China Construction Bank according to the financial supervision bureau's criteria is 137.932 billion yuan, with an increase of 30.271 billion yuan since the beginning of the year, showing a rapid growth rate, and a non-performing loan ratio of 0.20%.
The balance of inclusive innovation and entrepreneurship loans according to the financial supervision bureau's criteria is 15.648 billion yuan, with an increase of 3.661 billion yuan since the beginning of the year, representing a growth rate of 30.50%.
Serving 15,396 technology enterprises, an increase of 1530 since the beginning of the year; there are 6,215 technology enterprises with loans, an increase of 919 since the beginning of the year, representing a growth rate of 17.35%.
Since 2023, subsidiaries of China Construction Bank Group have invested 5.483 billion yuan in technology enterprises in Shanghai, with a cumulative underwriting amount of 2.978 billion yuan for science and technology bills. They have also cooperated with the Shanghai Guarantee Fund to provide a total credit amount of 0.5 billion yuan to small and micro technology enterprises.
▍ Controlling Financial Risks through Ecological Collaboration
However, technology innovation carries risks, and there is uncertainty in the transformation of achievements and industrial development. For banking institutions, controlling these risks is also crucial.
Zhou Jie admitted that although China's social financing has always been dominated by indirect financing, the banking system has accumulated a large amount of credit resources and service capabilities, but it is difficult to comprehensively implement comprehensive financial services for enterprises and technologies throughout their life cycle in the field of science and technology solely by the efforts of a commercial bank.
To this end, the Shanghai Branch of China Construction Bank adheres to the dual-drive of direct financing and indirect financing, synergizes and complements each other, and forms an alliance to promote comprehensive financial services for the science and technology industry.
According to Zhou Jie, in 2023, the Shanghai Branch of China Construction Bank will integrate resources from various levels of government departments, institutions, and China Construction Bank Group, and leverage the functions of commercial banking, investment banking, trusts, funds, insurance, leasing, and other functions. Organize financial institutions, venture capital institutions, key universities, corporate groups, service institutions, expert consultants, and other units to initiate the establishment of the "Jian•Hu Chain" Science and Technology Industry Financial Alliance.
With bank credit to guarantee the supply of basic funds for scientific and technological innovation, with risk capital to increase the supply of guidance funds for scientific and technological innovation, and with value-added services to build a circular system of scientific and technological innovation ecology, comprehensive linkage, all-round coordination, and full functionality, this characteristic technology financial service system serves the development of the science and technology industry and controls the risks of the financial system.
In addition, the use of technology to promote comprehensive financial services for the science and technology industry. China Construction Bank pioneered the exclusive evaluation system for the "technology flow" (adopted and implemented nationwide by the State Council in February 2020), focusing on evaluating the intellectual property rights and innovation capabilities of technology enterprises quantitatively, converting them into credit evaluation results, and enhancing the trustworthiness of technology enterprises.
Starting from March 2023, China Construction Bank has upgraded its indicators, models, data, computing power, and algorithms to measure the scientific and technological innovation value demonstrated by science and technology innovation entities in the "science and technology innovation cycle chain", converting them into credit evaluation results, and "not looking at financial statements but at ecology" to enhance the credibility of science and technology innovation entities.
The Shanghai Branch of China Construction Bank utilizes the strategic support of the head office's financial technology and the technology resources deployed by the head office in Shanghai. On June 11, 2023, it opened the Shanghai Special Zone of the head office's science and technology evaluation system, and on July 2, China Construction Bank Shanghai Branch independently developed the 1.0 version of the science and technology evaluation system, and utilized big data, cloud computing, AI, and other technologies to help customer managers understand, identify, and screen customers, support approval personnel in reviewing customers, identifying risks, and strengthening risk control, and strive to "understand the science and technology industry, understand the science and technology enterprises, understand the science and technology talents, understand the scientific and technological achievements, and enhance intelligent risk control".
"Expanding direct financing, developing venture capital, and strengthening patient capital have become the national policy orientation. The integrated operation of commercial and investment banking, the dual-drive of direct and indirect financing, is the only way for the development of commercial banks' science and technology finance. At the same time, as the financial settlement hub for scientific and technological innovation entities and the high-frequency financial consumer supply side required by units and individuals, it is both a glorious historical mission and an excellent development opportunity." Zhou Jie said, "In the future, commercial banks should continue to play their role as comprehensive hubs, strengthen their linkages with investment institutions, brokerage investment banks, insurance companies, and other financial partners, and jointly promote the coordinated efforts of stock loans, corporate bonds, and risk hedging in order to provide comprehensive, diversified, and relay-style comprehensive financial services for scientific and technological innovation, and contribute to the high-quality development of new productive forces in China and the construction of Chinese-style modernization."