RMB 40-50 Trillion Equity Guidance Fund: Reshaping China's Enterprise Financing Structure and A-Share Market

Based on comprehensive data I have collected, below is an in-depth analysis report:

January 10, 2026, Huang Qifan, Executive Vice Chairman of the Academic Committee of the China Institute for Innovation and Development Strategy and former Mayor of Chongqing Municipality, clearly pointed out at the 30th (2026) China Capital Markets Forum that to increase the proportion of enterprise direct financing through multiple channels and improve the enterprise capital replenishment mechanism, we need to advance “two wheels” simultaneously: developing the stock market well, and developing enterprise equity investment funds while improving the market-based mechanism for replenishing corporate equity capital[1].

The equity guidance fund proposed by Huang Qifan has the following core characteristics:

• Funding Sources
  : Four major channels including bank funds, social security funds, commercial insurance funds, and foreign exchange reserve funds
• Expected Scale
  : RMB 40-50 trillion
• Establishment Purpose
  : Replenish corporate equity capital and improve the enterprise capital replenishment mechanism

According to the data I collected, the scale of China’s major long-term capital already provides the foundation to support a RMB 40-50 trillion equity guidance fund:

According to Huang Qifan’s proposal, the estimated composition of funding sources for the RMB 40-50 trillion equity guidance fund is as follows:

This scale fully reflects the “bank-dominated” characteristic of China’s financial system – banking industry assets account for over 90% of total financial institution assets[4], which contains huge equity investment potential.

Although the proportion of direct financing has continued to rise in recent years, there is still a large gap compared with developed countries and the goals of the “15th Five-Year Plan”:

In the first three quarters of 2025, the proportion of direct financing surged to 44.4%, an increase of 9.6 percentage points compared with the same period in 2024[5]. This change is attributed to the low-interest rate environment combined with policy promotion, further opening up the development space of the direct financing market.

In 2025, the total A-share financing amount reached RMB 1.08 trillion, a 2.7-fold increase compared with 2024[6]:

• Equity Placements
  : RMB 887.732 billion, accounting for 82% (of which RMB 520 billion in capital injections from the Ministry of Finance to four state-owned banks was the core growth driver)
• IPO Financing
  : RMB 131.771 billion, accounting for 12.17%, with a year-on-year increase of 95.6%
• Convertible Bonds
  : RMB 63.133 billion, accounting for 5.83%, with a year-on-year increase of 30.77%

This structure reflects:

1. Placement financing remains the main force of A-share equity financing
2. The IPO market has recovered significantly, with prominent “hard technology” attributes
3. STAR Market and ChiNext have become the main battlegrounds for innovative enterprises to go public

1. Financing Difficulties for Sci-Tech Enterprises
   : Due to their “light assets, high risk, long cycle” characteristics, tech enterprises struggle to obtain traditional credit support
2. Insufficient Early-Stage Capital
   : In 2023, the proportion of investment amount in seed rounds and angel rounds was only about 5%, with most funds concentrated in growth-stage and mature-stage enterprises[7]
3. High Corporate Leverage Ratios
   : The leverage ratio of non-financial enterprises remains at a relatively high level, urgently requiring capital replenishment

The establishment of the equity guidance fund will fundamentally change China’s financing structure:

Equity Guidance Fund (RMB 40-50 trillion)
    ↓
Corporate Capital Replenishment
    ↓
Increase in Direct Financing Proportion (from 29% to over 55%)
    ↓
Decrease in Indirect Financing Proportion (from 71% to below 45%)

According to my calculation model, the establishment of the equity guidance fund will:

• Increase the proportion of direct financing by approximately
  26 percentage points
• Reach two-thirds of the 70% average level of OECD countries

According to the China Financial Stability Report (2025), as of the end of 2024, the circulating A-share market value held by various types of long-term funds is as follows[3]:

The establishment of the equity guidance fund will significantly increase the scale and proportion of long-term funds actually invested in the A-share market, and is expected to raise the proportion of institutional investors from the current approximately 15% to

1. Strategic Emerging Industries
   : Semiconductors, new energy, high-end equipment manufacturing
2. Future Industries
   : Artificial intelligence, quantum computing, biological manufacturing
3. Chokepoints in Technological Innovation
   : Domestic chips, industrial software, high-end medical devices

The industry distribution of A-share IPO financing in 2025 already reflects this orientation:

• Semiconductor industry: RMB 23.087 billion (top)
• Automobiles and parts: RMB 19.88 billion
• Electrical equipment: RMB 18.31 billion
• Hardware equipment: RMB 15.38 billion

The equity guidance fund will improve the quality of listed companies through the following methods:

1. Pre-Screening Mechanism
   : Enterprises invested in by the guidance fund must meet IPO standards or listed company merger and acquisition requirements
2. Industrial Empowerment
   : Act as a “companion runner” to support the full-life-cycle development of enterprises
3. Patient Capital Attribute
   : The term of existence will evolve from the traditional “5+2” model to “10+2” or even longer cycles[8]

1. Increased Capital Concentration
   : Funds will be highly concentrated in fields that align with the direction of new-quality productive forces and have industrial trends
2. Widening Valuation Differentiation
   : High-quality sci-tech enterprises will obtain valuation premiums, while traditional industry valuations will face pressure
3. Normalized Delisting
   : The survival-of-the-fittest mechanism will be strengthened, and junk stocks will be cleared out at an accelerated pace

1. Expansion of AIC Pilot Programs
   : The equity investment pilot program for financial asset investment companies has expanded from Shanghai to 18 cities, with contracted amounts exceeding RMB 350 billion[4]
2. Relaxation of Insurance Fund Restrictions
   : In September 2024, the proportion of equity assets allocated by insurance funds was raised to 50%[3]
3. Expansion of Annuity Funds
   : The upper limit for the proportion of equity assets was raised to 40%
4. Long-Term Assessment Mechanism
   : The basic endowment insurance fund implements a long-term assessment mechanism of 3 years or more

1. Improve the Legal Framework
   : Clarify the regulatory rules for bank funds and insurance funds to participate in equity investment
2. Establish a Fault Tolerance Mechanism
   : Learn from the due diligence exemption mechanism already established by 57% of mainstream guidance funds[8]
3. Optimize Exit Channels
   : Expand diversified exit paths such as IPOs, mergers and acquisitions, and S funds
4. Strengthen Coordination Mechanism
   : Establish an inter-departmental coordination mechanism for banks, insurance, social security, and foreign exchange reserves

1. Fund Maturity Mismatch Risk
   : Need to ensure that the attributes of long-term capital match the investment cycle
2. Moral Hazard
   : Need to prevent funds from “moving from real economy to virtual economy” and interest transfer
3. Market Volatility Risk
   : Large-scale fund inflows may exacerbate short-term market volatility
4. Exit Risk
   : Need to ensure smooth exit channels to avoid the formation of a “reservoir” (backlog)

• The framework of the equity guidance fund will be completed
• The first batch of funds will be launched, with a scale of approximately RMB 5-10 trillion
• The proportion of direct financing will rise to 35-40%

• The fund scale will reach RMB 30-40 trillion
• The proportion of direct financing will approach 50%
• The financing environment for sci-tech enterprises will be significantly improved

• The equity guidance fund will reach the target scale of RMB 40-50 trillion
• The proportion of direct financing will reach over 55%
• The international competitiveness of China’s capital market will be significantly enhanced

The RMB 40-50 trillion equity guidance fund proposed by Huang Qifan is a strategic measure to improve China’s financial system and support technological innovation and industrial upgrading. The establishment of this fund will:

1. Fundamentally Change the Financing Structure
   : Promote the proportion of direct financing from the current 29% to over 55%
2. Introduce Long-Term Funds to the A-Share Market
   : The proportion of institutional investors is expected to rise from 15% to 25-30%
3. Strengthen Support for Technological Innovation
   : Provide sufficient capital for “chokepoint” technologies and strategic emerging industries
4. Promote the Healthy Development of the Capital Market
   : Form a positive cycle of “long-term funds for long-term investments”

In the opening year of the current “15th Five-Year Plan”, this proposal has important strategic significance. The continuous improvement of supporting policies and the establishment of inter-departmental coordination mechanisms will be the keys to ensuring the effective functioning of the equity guidance fund.

[1] Securities Times - Huang Qifan: Propose to Establish an Equity Guidance Fund with Bank, Social Security, Insurance, and Foreign Exchange Funds (https://www.stcn.com/article/detail/3584761.html)
[2] Sina Finance - Current Development Status and Future Trend Outlook of China’s Wealth Management Industry in 2025 (https://www.163.com/dy/article/KIQJ4OU205568W0A.html)
[3] Economic Reference Network - Central Bank Releases Report: Overall Financial Risks Are Converging and Generally Controllable (http://jjckb.xinhuanet.com/20251229/0c6a0255d537404aa83e5772fe07abb1/c.html)
[4] FOF Research Center - This Bank Allocates RMB 10 Billion for Equity Investment (https://finance.sina.com.cn/stock/relnews/cn/2026-01-06/doc-inhfkskp8246451.shtml)
[5] UseWealth - Environmental Evolution and Financial Adaptation in the “15th Five-Year Plan” Period (https://www.usewealth.com/Information/Details.aspx?i=139285)
[6] Eastmoney - A-Share Financing Warms Up, Hong Kong IPOs Boom! 2025 Investment Bank Ranking Competition Intensifies (https://finance.eastmoney.com/a/202601093613995936.html)
[7] Special Report on Equity Investment and Financing of Financial Asset Investment Companies (AICs) (https://www.stfmonthly.com/cth/info_74.aspx?itemid=3022)
[8] Economic Reference Network - 7th China FOF 50 Forum Held in Beijing: “Patient Capital” Hotly Discusses New Changes and Opportunities (http://jjckb.xinhuanet.com/20251229/61377929d6f14d9684636f5ac9a0fe7b/c.html)