(Yicai) Sept. 9 -- One primary strategic mission of China's financial system is supporting scientific and technological innovation well, according to the chairman of the Shanghai Finance Institute.

"There is a large demand for technological financial services, but the supply is relatively small," Tu Guangshao said at the 17th Pujiang Innovation Forum's WeStart Global Entrepreneurial Investment Conference yesterday.

Despite its rich financial resources, China has structural problems regarding support for scientific and technological innovations, Tu pointed out. These include the mismatch between banks-led indirect financing and the needs of scientific and technological innovation firms and the different investment periods from the needs of the tech industry, he said.

China should further refine investment-loan coordination institutions, step up the development of equity investment, especially risk investment, develop mixed investment and loans, promote bank and investment institutions tie-ups, expand the scale of credit and development pledged loans such as intellectual property, advance venture capital and merges and acquisition loans, and participate in the VC bond market, Tu noted.

The country should also optimize the development ecology of investment-loan coordination, including market mechanisms, regulatory policies, and government resources' support, to promote scientific and technological companies' innovative development, he added.

Loans for high and new-tech firms accounted for 5.6 percent of the total outstanding loans in China last year, which is relatively low, according to official figures. Scientific and technological innovation firms' equity financing made up almost 6.1 percent of the total newly added Chinese yuan-denominated loans in 2022.

Editors: Zhang Yushuo, Martin Kadiev