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Zhang Wei: STAR market, Key to Scientific Competitiveness

2018.11.06 Qu Hongyan Views:


“These measures will effectively bring us more vigorous SMEs and tech companies. All bets are off.” said Zhang Wei.

Zhang Wei: STAR market, Key to Scientific Competitiveness

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Shanghai Stock Exchange’s decision to establish STAR market and pilot registration-based IPO system rocketed VCs and PEs. Zhang Wei, chairman of CoStone Capital said in an interview on November, that the timely measures embodied the important role of capital markets in economic and social activities. These packages are crucial to the sound and sustainable development of China’s economy, society and capital markets in the following respects:

l  Bridging technology with markets through capital markets is the key to enhance scientific and technological competitiveness. The world-leading sci-tech strength of America and other developed countries prompted rapid economic growth. The innovation of enterprises, where the strength comes from, desires the support from capital markets. The innovation-driven start-ups and tech companies can thus go public and be stronger, which is essential to the scientific and technological strength and competitiveness of China.

l  Reforming the registration-based IPO system is critical to capital markets to better serve the real economy. SMEs and tech companies urgently need the support from capital markets, in order to get more efficient financing. It can fundamentally solve the difficulty in financing for market entities especially SMEs.

l  The registration-based IPO system is key to improve the basic systems of capital markets. Straightening out the relationships between entry barriers and quality of listed companies, and balancing strict supervision and law-based supervision, can facilitate the sound and sustainable development of capital markets.

“These measures will effectively bring us more vigorous SMEs and tech companies. All bets are off.” said Zhang Wei.

Above: Excerpt of the interview with Zhang Wei from Shanghai Securities. Please refer to the link below to view the interview in full:

Rewritten by: Luo Xinying, Edited by: Du Zhixin, Wei Yiyi


The year 2019 marks the fortieth anniversary of China’s Reform &Opening-Up, once again, we meet at the turning point of history. What’s the next step for the game, is there any clear guidance? The answer is affirmative.

Our country is enjoying a good momentum of development, which does not come from the Washington Consensus nor the Beijing Consensus. China’s experience has proved that both the visible hand and the invisible hand are crucial: the visible hand, stands for the government-led reform, and would yield benefits for reform and opening up; the invisible hand, stands for the Marginal Power represented by the private sector, and would improve economic efficiency and tax collection, create jobs and employment opportunities.

Provided that we want to protect and expand the benefits form reform, three simple but mandatory agreements are to be made and followed: No.1 Private ownership must be recognized, protected and treated equally with public ownership constitutionally, both ownerships are scared and inviolable;No.2 Make further clarification of the principal position of market economy, “deepen economic system reform by centering on the decisive role of the market in allocating resources”, as President Xi addressed in the third Plenary Session of the 18th CPC Central Committee;No.3 Implement the guiding principles of “comprehensively promoting law-based governance” of the fourth plenum. The rule of law is essential for economic growth, irreplaceable to protect private ownership, and necessary to encourage innovation and entrepreneurship.

Above are three rules for us to avoid falling into the Middle-income Trap. Assuming that we are breaking systematic barriers to private enterprises’ participation in market economy, and boosting innovation and entrepreneurship of our society, then we are heading towards a promoting direction. We are marching in the path of light, regardless of the ups and downs of Sino-US relationship, the drop in GDP growth rate, or the monetary policy.

These principals also apply on knowing how better to run a business: don’t be hedged by rules and regulations at the beginning, pay more attention to your survival, and you’ll learn more when you start your second business.

For many years, Huawei has been the only Chinese company on the list of the Top 50 R&D Spenders. Regardless of the economy and its income, what Huawei has been doing is investing in its future, dedicated to R&D, continuously and resolutely. This provisional work underscores Huawei’s accomplishments, making Huawei anindustry leader.

So, there are standard answers on how to run a company,which could be summarized as concentration and professional dedication, continuous investment on innovation and trying harder in R&D. Entrepreneurship is also important, every single company needs entrepreneurs to push aside all obstacles and difficulties, to implement strategies and ideas. We, as investors, are destined to look for such outstanding entrepreneurs and their companies, invest in them and partner with them.

At this key point of history, a country, a company, or asingle individual, will all need to find the right path. Four decades after the Reform and Opening-up, it’s time to learn from our experience and stop “wadding across


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