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China to Streamline Rules for Overseas Tech Listings, Vows Greater Support for Startups

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China’s securities regulator will establish a more transparent and predictable regulatory framework to support technology firms seeking overseas listings, a senior official announced Thursday, signaling Beijing’s renewed push to boost capital access for its tech sector amid intensifying U.S.-China tensions.

Speaking at a news briefing, Yan Bojin, Chief Risk Officer at the China Securities Regulatory Commission (CSRC), said the regulator aims to simplify procedures and safeguard fund usage, ensuring capital raised from IPOs is channeled directly into core business operations rather than speculative activities.

“We will support more high-quality, unprofitable tech companies to go public,” Yan said, referencing China’s desire to emulate Western models of nurturing early-stage innovation through public markets.

Key Highlights:

  • Improved regulatory clarity for tech firms listing abroad

  • Stronger oversight on how IPO funds are used

  • Expanded support for pre-profit tech startups to access equity markets

  • Further reforms to Shanghai’s STAR Market and Shenzhen’s ChiNext board

  • Encouragement for “red-chip” tech companies (Chinese firms listed in Hong Kong) to consider domestic IPOs

Strategic Context

The policy update comes amid:

  • Beijing’s push for tech self-sufficiency, especially in semiconductors and AI

  • Escalating U.S. export controls and investment restrictions targeting Chinese tech firms

  • Efforts to keep promising Chinese startups within domestic capital markets, rather than relying heavily on U.S. IPO routes

The CSRC’s focus on “red-chip” firms also suggests efforts to strengthen Hong Kong’s role as a financial bridge while still drawing key players back to mainland exchanges.

Implications

The shift is seen as part of a broader capital markets reform agenda that aims to:

  • Enhance investor confidence

  • Deepen tech financing channels

  • Retain strategic tech assets within China’s influence

  • Reduce dependence on Western listing venues, particularly as geopolitical risks mount

While regulatory challenges and global tensions remain, the announcement marks a clear signal that Chinese authorities are seeking to balance market openness with national security priorities.

DeepSeek Narrows AI Gap with US, Says 01.AI Founder Lee Kai-fu

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China has significantly closed the artificial intelligence (AI) development gap with the United States, with companies like DeepSeek narrowing the divide to just three months in certain areas, according to Lee Kai-fu, CEO of Chinese AI startup 01.AI. Lee, a renowned figure in AI and former head of Google China, revealed in an interview that Chinese firms, particularly DeepSeek, have enhanced efficiency in chip usage and algorithm application, accelerating their progress.

DeepSeek’s launch of an AI reasoning model earlier this year challenged the assumption that U.S. sanctions were hindering China’s AI growth. The model, trained using less advanced chips, was cheaper to develop than its Western counterparts, shaking the global AI industry. Lee pointed out that previously, the gap between China and the U.S. was six to nine months, but now it has narrowed to just three months in some core AI technologies. In specific areas, Chinese companies have even surpassed their Western rivals.

Despite U.S. sanctions on semiconductors, which initially posed challenges, Lee believes that these constraints have driven Chinese companies to innovate. He noted that DeepSeek’s new approach to reinforcement learning—a technology that shows users the reasoning process before delivering answers—demonstrates this innovation, now on par or even ahead of U.S. developments.

Lee also highlighted that China’s tech sector, initially seen as trailing in AI development, rapidly entered the generative AI race after OpenAI’s ChatGPT launch in late 2022. With startups like DeepSeek and 01.AI entering the field, China’s AI capabilities have gained global attention.

Lee’s 01.AI, which he founded in 2023, focuses on practical AI applications rather than developing proprietary foundational models, aiming to help enterprises deploy AI solutions efficiently. The company launched Wanzhi, a software platform, earlier this month to assist businesses in integrating AI technologies, already generating revenue and forecasting substantial growth for 2025.

Korea’s NH Venture Targets Investments in Israeli Tech Startups

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NH Venture Investment, a branch of NongHyup Financial Group (NH), is looking to invest millions of dollars in Israeli tech startups, aiming to combine Israel’s innovative technologies with Korea’s manufacturing capabilities to create larger global companies. Established in 2019, NH Venture seeks to build on Israel’s deep-tech expertise, including areas such as artificial intelligence, semiconductors, defence, healthcare, and quantum computing.

In July 2024, NH Venture teamed up with OurCrowd, an Israeli investment platform, to establish the Trepont Fund—an $80 million initiative designed to invest in 30 startups across Israel, Korea, and Silicon Valley. CEO Hyun Jin Kim confirmed that NH Venture plans to invest at least $40 million of the fund specifically in Israeli startups. One of the company’s notable investments is in Kardome, an AI voice recognition company that collaborates with Korean giants LG and Hyundai Motors.

During his recent visit to Israel, Kim met with several startups, including Hailo, an Israeli unicorn in the AI space. Kim emphasized the potential for strong collaboration between Israeli innovation and Korean manufacturing, particularly to penetrate the U.S. market. Despite concerns around the ongoing Israel-Hamas conflict, Kim noted that innovation has remained constant in the region, and NH Venture is not deterred by the situation.

The fund is specifically targeting early-stage companies that have already developed proven products. Ely Razin, a partner at OurCrowd, highlighted that Korean interest in Israeli startups has grown, especially following the Israel-Hamas ceasefire.

The relationship between Israel and Korea is well-established, with Samsung, LG, and Hyundai all having venture arms in Israel. Both countries are among the global leaders in research and development.

Seong Ryong Kang, CEO of the Korea-Israel Industrial R&D Foundation, believes the cooperation between the two countries is more seamless compared to other Asian nations due to their complementary industries, and the presence of Korean venture firms in Israel underscores a strong willingness to collaborate.