(Yicai Global) Jan. 6 -- The Chinese mainland's capital market provided direct funding of more than CNY1 trillion (USD143.4 billion) for manufacturing firms last year in 34.2 percent annual growth, while the science and technology innovation board the Shanghai Stock Exchange recently instituted contributed nearly half to the funds they raised in initial public offerings.

Capital raised from manufacturing firms' IPOs in the Chinese mainland tallied CNY115 billion (USD16.5 billion) last year in an annual 35.6 percent rise, and 70 companies completed their listings on the Shanghai Stock Exchange's Star Market, which began to trade in July, thereby raising a total of CNY76.5 billion, data from the Choice financial information exchange platform of Hong Kong fintech firm EastMoney International Securities show. Manufacturers secured investment of CNY57.3 billion, making up about three-quarters of that.

Industrial firms listed in the mainland also reeled in CNY402 billion via additional share issues last year, a figure which climbed 26 percent from 2018, and gained CNY16.4 billion through stock placements, up by over one-half annually. These companies also attracted CNY473.4 billion via bond issuances in 41.1 percent annual growth.

China strengthened direct financing's support of manufacturing last year by various means, including establishing the SSE's Nasdaq-style sci-tech board and piloting a registration-based IPO system, and fine-tuning rules for re-financing, mergers, acquisitions and restructuring, Pan Xiangdong, the chief economist at New Times Securities, told Securities Daily, adding the country has also ensured sufficient liquidity by reducing the reserve requirement ratio to facilitate medium-term loans.

The State Council, China's cabinet, stressed the need to spur the steady, stable growth of industry and steer financial institutions in easing the funding difficulties of small and medium firms at its executive meeting on Jan. 3, its first in the year. It also urged increasing mid- and long-term loans targeting manufacturing and advised offering greater privileges for equity investment and fundraising via bond issues to industry at the meeting.

China should also focus on practical enhancements of the financing terrain for micro and small firms by adopting targeted cuts to the RRR, re-lending and re-discounting, macro-prudential assessment and credit management, and wield its other policy tools this year, the work conference the People's Bank of China held simultaneously also concluded.

Editor: Ben Armour