On Sept. 16 Qiushi published a signed article by PBOC Governor Pan Gongsheng
saying credit growth alone cannot measure the strength of financial support for
the real economy. He said technological innovation is complex and better served
by a diversified financing structure: tech firms typically pass seed, start-up,
growth and maturity stages with materially different risk profiles and funding
needs, requiring a range of markets and financial ecosystems. Early-stage firms
rely mainly on private equity and venture capital; in later stages they can
finance via bank loans, bonds and equity. Financial markets have an advantage in
funding frontier, high-risk/high-return innovation and provide a healthy
substitution and diversion from bank lending, and Pan said this structural
change will become the norm.
