CASS Academician Li Yang: Building a relay funding chain for sci-tech innovation industry financing

By Binya Hu, SFC 21st Century Business Herald

At the 9th Hongqiao International Economic Forum, the parallel session “Pudong and the World: Technological Innovation Driving Industrial Upgrading, Smart Integration Shaping a Shared Future” brought together global business leaders to explore international cooperation, technological innovation, green development and shared growth.

Li Yang, a member of the Academic Division of the Chinese Academy of Social Sciences, Chairman of the National Institute of Financial and Developmental, called for coordinated efforts to strengthen China's sci-tech innovation system, particularly by establishing a continuous financing chain to support innovation at every stage.

Li, who was attending the CIIE for the fourth time, described sci-tech innovation as an industrial chain comprising four stages: theoretical research, technology development, commercialization and industrial application. Shanghai has the conditions to support all four, he said. The priority is to advance them systematically through three key tasks: revitalizing existing assets, strengthening new growth and developing industries of the future.

Revitalizing existing assets means improving the quality and efficiency of traditional sectors. Developing advanced manufacturing processes and green technologies will help reinforce the foundations of modern manufacturing, Li said.

Strengthening new growth involves sectors such as new energy, integrated circuits, biomedicine, high-end equipment, artificial intelligence and new materials. These industries are already playing an increasingly important role in the global economy. “Their further development will help China move up the global value chain,” he noted.

Li said that developing industries of the future requires forward-looking investment in fields such as quantum information, humanoid robots and the low-altitude economy. As he mentioned, the immediate priority is to foster new technologies and create application scenarios to build long-term competitive advantages.

Li identified five major strengths that position Shanghai to become a sci-tech innovation hub.

First, Shanghai has substantial economic strength. As a major financial and economic center in the Far East for more than a century, Shanghai recorded a GDP of 5.67 trillion yuan in 2025, with a permanent population of 24.85 million. Its per capita GDP stood at approximately 228,000 yuan, equivalent to around US$32,000 at current prices. Pudong New Area has performed even better, with per capita GDP surpassing that of Italy, Li noted.

Second, Shanghai has a high urbanization rate and continues to attract residents. Its urbanization rate stands at 90.2%, while its permanent population continues to grow. Population trends, Li said, offer a direct indication of a region's economic development and future prospects.

Third, Shanghai has a strong talent pool. Shanghai has 81 colleges and universities, including adult education institutions. According to China's seventh national population census, there were 33.87 university-educated people for every 100 residents in Shanghai. This concentration of talent provides a solid foundation for scientific and technological innovation, Li said.

Fourth, Shanghai benefits from national strategic support. As he mentioned, among China's three major international science and technology innovation hubs—the Yangtze River Delta, the Beijing-Tianjin-Hebei region and the Guangdong-Hong Kong-Macao Greater Bay Area, the Yangtze River Delta, with Shanghai at its core, ranks among the strongest in overall development.

Fifth, Shanghai is backed by a comprehensive industrial chain. Li said that China has the world's most complete industrial chain and a powerful manufacturing system, an advantage particularly evident in the Yangtze River Delta. “Innovations developed in the region can be rapidly translated into industrial applications and brought to market,” Li said.

To further develop Shanghai into a sci-tech innovation hub, Li proposed three priorities: strengthening the role of enterprises as the primary drivers of innovation, making breakthroughs in key and core technologies, and improving collaboration among industry, universities and research institutions.

Finance is another critical component of the innovation system. Li called for building a continuous financing chain to support technological innovation, from seed and angel investments to venture capital (VC) and private equity (PE), followed by bank lending, bond financing and equity financing. Each stage is essential to ensuring that innovative projects receive sustained financial support as they develop.

He also highlighted the need to improve insurance and risk management mechanisms. “Risk should not simply be viewed as something to avoid. In a sense, it is a scarce resource,” Li said. Financial institutions should focus on identifying risks and developing the tools, mechanisms and systems needed to manage them effectively and create value.

Li stressed that establishing effective mechanisms to tolerate and manage innovation-related risks is an indispensable institutional safeguard for the system.

From laboratory research to industrial production, and from seed funding to mature-stage financing, every link in the innovation chain needs adequate support. Whether Shanghai can successfully connect these links will be a crucial test for the development of China's broader sci-tech innovation system, Li said.

Chief Producer: Zhao Haijian

Supervising Producer: Shi Shi

Editor: Shi Shi

Reporter: Hu Binya

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Produced by: Southern Finance Media Corp.