BEIJING: China has eased restrictions on merger and acquisition (M&A) loans for tech firms in a major push to drive innovation and strengthen its technological edge. The country’s financial regulator announced the new measures on Wednesday, aiming to channel more capital into the sci-tech sector.
Under the new pilot programme, banks can now lend up to 80% of transaction values for acquisitions involving controlling stakes in tech firms, up from the previous 60% cap. Loan repayment periods have also been extended from seven years to ten years, giving businesses more flexibility.
The programme covers 18 key cities, including Beijing, Shanghai, Shenzhen, and Chengdu, focusing on regions known for their innovation ecosystems, such as the Yangtze River Delta, the Greater Bay Area, and the Chengdu-Chongqing area.
Eligible banks include state-owned, joint-stock, and urban commercial banks with strong risk management. To qualify, tech firms must demonstrate robust R&D, market potential, and solid credit records.
In addition, China’s National Financial Regulatory Administration is expanding a pilot programme for equity investments by financial asset investment companies. The initiative, originally launched in 2017, has already attracted over 350 billion yuan (US$48.3 billion) in signed investments. The latest measures will extend the programme beyond pilot cities to entire provinces, aiming to boost private sector growth.
The policy also encourages insurance funds to play a greater role, leveraging their long-term investment potential. With these changes, China hopes to create a more supportive financial environment for tech firms, fostering sustained innovation and industrial competitiveness.
