China’s new sci-tech debt policy faces implementation challenges, with issuer participation currently dominated by large state banks and SOEs while smaller private firms remain sidelined. This imbalance risks limiting the policy’s effectiveness in fostering broad-based innovation across China’s tech ecosystem.
A critical structural issue involves the maturity mismatch between available debt instruments and actual R&D needs. Most offerings provide 3-5 year funding, falling short of the 7-10 year capital commitments typically required for meaningful technological breakthroughs, forcing companies to compromise on research timelines.
To truly support China’s innovation ambitions, policymakers must address these gaps by encouraging wider participation from regional financial institutions and developing longer-duration debt products tailored to R&D cycles. Without such adjustments, the policy may struggle to become the transformative funding channel it was designed to be.
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