TLDR:
- China announced new policies to support venture capital, raising hopes for faster IPO approvals.
- Investors are watching the speed of IPO approvals to gauge the market’s response.
Chinese authorities recently released high-level measures to promote the high-quality development of venture capital, with a focus on supporting technological breakthroughs. This move is seen as an effort to address the slowdown in investment capital and startups in China over the past three years due to increased regulatory scrutiny. Marcia Ellis, a global co-chair of private equity practice, emphasized the importance of implementing regulations for successful investments in technology. The policy also aims to expand exit channels for venture capital and facilitate overseas listings.
Investors are closely monitoring the speed of IPO approvals, as both onshore and overseas public offerings have slowed down recently. The new measures include clarifications on overseas IPO requirements, with an emphasis on compliance with national security measures and data protection laws. The China Securities Regulatory Commission has also increased fines for misleading investors and supports mainland Chinese companies listing overseas, particularly in Hong Kong.
However, challenges remain, with increased scrutiny on overseas IPOs and foreign capital going into China. The market is watching the response to these new policies, as they could potentially impact the venture capital market in China and its competitiveness with the U.S. in the tech race.
