Springtime for Tech Stocks
The STAR Market is not only an improvement to the secondary market; it is also a bridge between primary and secondary markets. For a long time, angels, VCs, and PEs backing startups have had limited exit options. On paper there were three channels — buybacks by major shareholders, equity transfers, and IPOs. But due to arrangements in China’s A‑share market and the underlying logic of indirect financing, in practice only equity transfers worked reliably. A small number of lucky startups were thus relayed into the secondary market — carp leaping the Dragon Gate. Others went overseas to list. Many innovative but loss‑making tech companies could only hope to go public after turning profitable, which greatly constrained industry development. With the launch of the STAR Market, tech stocks are heading into spring.
What counts as a real “tech stock”? The answer is hinted at in a potential US–China trade agreement: reports suggest progress on technology transfer and IP protection. Great powers falling into the Thucydides Trap is hardly avoidable. President Trump’s accusations — that China forces tech transfer from foreign investors and neglects IP — essentially allege that China acquires advanced technologies through unfair competition.
China’s first‑generation tech firms, represented by Lenovo and Huawei, followed a “technology–manufacturing–trade” route. The second generation, represented by NetEase, Sina, and Sohu, pursued “Copy to China.” The third generation, represented by Baidu, Alibaba, and Tencent, combined learning from others with independent R&D — benefiting to some extent from US tech flows to China.
Starting a trade war at this point is unlikely to be very effective, because the fourth generation of tech companies — represented by STAR Market candidates — follows a “research commercialization” route, with low external dependence. After sustained investment of people, funding, and materials, China’s research level has moved from catching up to running alongside — and now leading in places. Beyond a vast university system, there is the CAS three‑tier research network, and sectoral research systems such as CETC or ChemChina. With policy now loosening, more high‑quality companies will naturally flow to the STAR Market.
Venture firms are already tracking the commercialization of tech outcomes from universities and institutes. The “5G + IoT + Big Data” industry cluster, gene tech, and advanced manufacturing are likely to be focal areas for the STAR Market. As for which specific companies will be first‑wave beneficiaries, check against documents like the STAR Market’s Trial Measures for IPO Registration to find your match.
Published at: Mar 4, 2019 · Modified at: Oct 26, 2025
