The recent meeting of the Political Bureau of the Communist Party of China Central Committee emphasized the need to develop new quality productive forces according to local conditions. We need to strengthen the layout of national strategic scientific and technological forces, cultivate and expand emerging industries, advance the layout and construction of future industries, and use advanced technology to empower the transformation and upgrading of traditional industries. We should actively develop venture capital and strengthen patient capital. This is also the first time that "patient capital" has been mentioned at a meeting of the Central Political Bureau. Industry insiders believe that strengthening patient capital, serving technological innovation and the development of new productive forces, is in line with the requirements of high-quality development in China's capital market. What is patience capital mainly focused on medium - and long-term investment? On December 14th last year, the China Securities Regulatory Commission held an expanded meeting of the Party Committee to convey the spirit of the Central Economic Work Conference. It was pointed out that promoting dynamic balance between investment and financing should be given a more prominent position, vigorously promoting investment side reform, promoting a sound policy environment conducive to the entry of medium and long-term funds into the market, guiding investment institutions to strengthen countercyclical layout, and strengthening patient capital. Earlier in July, the State owned Assets Supervision and Administration Commission of the State Council proposed to promote the concentration of forward-looking strategic emerging industries in state-owned capital, and to be a "long-term capital", "patient capital", and "strategic capital", during the action seminar on deepening and improving the reform of state-owned enterprises held by local State owned Assets Supervision and Administration Commission leaders. The industry generally believes that the key to patient capital is stability and long-term. Xu Chi, Chief Strategy Analyst of Zhongtai Securities, said that patient capital refers to capital that focuses on medium - and long-term investments, adheres to value investment and responsibility investment, and does not aim for short-term trading profits. In the primary market, patient capital mostly refers to private equity funds that invest in the medium to long term. For the secondary market, long-term funds such as pension funds, insurance funds, and industrial capital are all patient capital and are the "ballast stones" of the capital market. This type of capital has a stable source of funding, a clear investment framework, and a longer investment duration, which can truly improve the market investor structure and stabilize the market valuation center. Zhejiang Securities believes that patient capital refers to funds that focus more on medium - and long-term investment returns while mitigating short-term market fluctuations. In the primary market, it refers to private equity funds with medium - and long-term investment characteristics, while in the secondary market, it mainly includes funds such as social security funds, pension funds, occupational pension funds, and industrial capital. Xu Chi believes that the development of patient capital can be combined with macro policy needs at different stages, better playing the role of financial service entities, and meeting the requirements of high-quality development of China's capital market. In the medium to long term, this type of capital will become an important source of incremental funding for the future capital market. In fact, in recent years, actively promoting the entry of long-term funds into the market and cultivating patient capital has always been one of the focuses of capital market reform and development. The China Securities Regulatory Commission (CSRC) system work conference held at the beginning of this year stated that efforts should be made to vigorously promote investment side reform, accelerate the pilot implementation of long-term stock investment reform for insurance funds, improve long-term assessment of investment institutions, improve the policy environment conducive to the entry of medium and long-term funds into the market, and promote dynamic balance between investment and financing. The State Council recently issued several opinions on strengthening supervision and risk prevention to promote high-quality development of the capital market (referred to as the "Opinions" or the new "National Nine Articles"), which further clarifies the need to establish and cultivate a market ecosystem for long-term investment, improve and adapt to long-term investment
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