(Yicai Global) Dec. 7 -- China's cabinet has issued several policies this week that allow scientists to invest in state-owned research institutions and take a share in the patents they help create as the nation looks to step up its game in tech innovation.

The State Council made the decision at a regular meeting on Dec. 5, according to a document published on the government website. Similar rules already existed but in limited capacity, such as at the Zhongguancun Science Park in Beijing and Shanghai's Zhangjiang Hi-Tech Park.

The move follows on from President Xi Jinping's proposal for a science and technology board on the Shanghai Stock Exchange, which will grant more small companies access to funding to support research and development. Xi announced the new board, for which officials are drafting up listing rules, at the first ever China International Import Expo held in Shanghai last month.

The government has also encouraged universities and other research institutes to partake in corporate research, which will open up a greater range of funding channels for small- and medium-sized tech firms, particularly those that are unprofitable or do not hold many assets.

It also wants to see more equity funding go toward tech startups, and insurance products that cover patents to ensure innovative companies do not give up on development.

Editor: James Boynton