From zero to $89b in four years, STAR Market surges amid China's tech innovation
Published: Jul 24, 2023 12:37 AM
STAR market Photo:VCG

STAR market Photo:VCG

China's STAR Market, a premier listing venue for prominent Chinese unicorns, marked its fourth anniversary on Saturday, with market capitalization of 6.4 trillion yuan ($89 billion) after starting from scratch, as the nation's technology has been strengthened and the capital market has expanded.

Experts said that the STAR Market, often called "the NASDAQ of China," has become an important incubator for domestic science and technology companies, highlighting the nation's stronger innovation and confidence of industry players, as well as ramped-up government support for innovation.

As of Saturday, there were 546 companies listed on the Shanghai Stock Exchange's Science and Technology Innovation Board, commonly known as the STAR market, with a total market capitalization about 6.4 trillion yuan. 

Cumulative turnover has reached 39.78 trillion yuan since the market opened in 2019.  

As of end-June, IPO financing on the market had exceeded 840 billion yuan, accounting for more than 40 percent of total domestic A-share financing, according to media reports.

It was also the world's top bourse in terms of IPO proceeds. The STAR Market hosts companies from various industries, such as biomedicine, new energy, new-generation information technology and environmental protection, media reports said.

The market has achieved tremendous development both in scale and quality in just four years. Such a significant outcome is attributed to China's rapid economic development, especially a boom in the science and technology sectors where many companies have emerged, along with their innovation capabilities, Li Changan, a professor at the Academy of China Open Economy Studies of the University of International Business and Economics, told the Global Times on Sunday.

The high research and development (R&D) investment of listed companies has been a prominent feature of market, data showed. In 2022, total R&D investment of the listed companies reached 128.5 billion yuan, a year-on-year increase of 28 percent.  

"In addition to rising innovation in the field, the supportive government policies that have been introduced have also been a driver and improved the quality of the listed companies and the market itself," Li said.

The continuous improvement of China's capital market has created a better environment for the fast development of the STAR Market.

The market has huge scope for development, as China's economic scale is expanding and the nation is putting more weight on the independent development of science and technology, Li said.