Cover Story: A New Gold Rush Begins in China’s Hard Tech Sector

In mid-July 2025, China’s financial regulators initiated a significant shift in capital market policy. The Shanghai Stock Exchange introduced a “sci-tech growth tier” within its STAR Market, allowing 32 unprofitable, high-potential technology companies—spanning AI, chips, biotech, and aerospace—to list for the first time in two years under a revived “fifth listing standard.” This move comes against a backdrop of a venture capital freeze: American funding has retreated due to U.S. investment restrictions, which contributed to a 42% year-on-year fall in new VC/PE funds in 2024, reaching the lowest point in a decade. Regulators moved decisively to maintain momentum in hard tech, opening up IPO windows for loss-making but innovative companies as IPO applications on Chinese exchanges surged, hitting a record 40 new filings in one day in June 2025. In parallel, Hong Kong also updated its rules to attract pre-profit tech firms, creating a dedicated technology enterprises channel and facilitating high-profile dual listings and public debuts by early-stage AI and biotech startups [para. 1][para. 2][para. 4][para. 5][para. 6][para. 7][para. 8][para. 9][para. 10][para. 11][para. 12][para. 13][para. 14][para. 15][para. 16][para. 17][para. 18][para. 19][para. 20].

While both Shanghai and Hong Kong are competing to attract the most promising tech companies—including capital-intensive sectors like semiconductors and AI—authorities remain selective, requiring that listed companies demonstrate advanced and commercially promising technologies, even if their profits remain distant. The revived sci-tech tier bridges the gap, providing public market access to speculative moonshots under stricter standards for market capitalization and commercialization prospects [para. 19][para. 20][para. 21][para. 22].

A flagship case is Wuhan Heyuan Biotechnology Co. Ltd., which became the first loss-making company in two years to clear the STAR Market’s new listing path in July 2025. Heyuan’s core innovation is recombinant human albumin produced from genetically modified rice—addressing China’s dependence on imported plasma-derived protein. After surviving a $67 million loss over 2022-2024, the company’s drug (HY1001) reached Phase III and is under priority review, with plans to raise 2.4 billion yuan ($334 million) to fund commercialization. Heyuan’s listing, permitted by the new standard (which requires at least 4 billion yuan market cap), signals to the market that technical originality and industrial impact count as much as (or more than) near-term profit [para. 23][para. 24][para. 25][para. 26][para. 27][para. 28][para. 29][para. 30][para. 31][para. 32][para. 33][para. 34][para. 35][para. 36].

The semiconductor race remains central. Companies like ChangXin Memory (valued at 140 billion yuan) and Unisoc (66 billion yuan) are preparing large IPOs, while GPU startups like Moore Threads and MetaX—founded by Nvidia and AMD veterans—are racing to go public amid blacklists and U.S. technology sanctions. Both remain heavily loss-making, with R&D spending far outstripping revenue, but the policy opening enables them to seek capital markets support. Meanwhile, Unisoc’s strong comeback and growing share in global mobile chips underpin optimism for sectoral self-reliance [para. 37][para. 38][para. 39][para. 40][para. 41][para. 42][para. 43][para. 44][para. 45][para. 46][para. 47][para. 48][para. 49][para. 50][para. 51][para. 52][para. 53][para. 54][para. 55][para. 56][para. 57][para. 58][para. 59][para. 60][para. 61][para. 62][para. 63].

The AI and robotics boom is also intensifying. Zhipu AI, a large language model startup, initiated IPO preparations, but profitability and business model questions linger across the field. Embodied AI, such as humanoid robotics (e.g., AgiBot, Unitree), has seen a surge in fundraising and creative methods to achieve public listings, including reverse takeovers. While demand and sustainable business models for humanoids remain unproven, industrial robotics firms such as Jaka Robotics and Geek+ are grounding the sector with genuine revenue and market traction [para. 64][para. 65][para. 66][para. 67][para. 68][para. 69][para. 70][para. 71][para. 72][para. 73][para. 74][para. 75][para. 76][para. 77][para. 78][para. 79][para. 80][para. 81][para. 82][para. 83][para. 84][para. 85][para. 86][para. 87][para. 88][para. 89][para. 90][para. 91][para. 92][para. 93][para. 94][para. 95][para. 96][para. 97][para. 98][para. 99].

As China’s regulators and markets enter “the great IPO reopening,” questions remain as to whether this period of opportunity will last. Hong Kong’s tech stock rally appears more durable, drawing in global capital due to policy support and improved listing quality. Yet, caution persists, with industry veterans emphasizing that the current surge is likely more a recalibration than a long-term bull run. Goldman Sachs reports show 42% of Hong Kong’s IPO proceeds in 2025 came from cornerstone investors, two-thirds from overseas, reflecting a measured return of international interest. Analysts predict a split market: Hong Kong as the venue for riskier, earlier-stage ventures, and Shanghai for mature, revenue-generating firms. Ultimately, capital markets are reviving amid policy uncertainty, but sustainable growth will depend on patient investment, market discipline, and continued reforms to boost innovation [para. 100][para. 101][para. 102][para. 103][para. 104][para. 105][para. 106][para. 107][para. 108][para. 109][para. 110][para. 111][para. 112][para. 113][para. 114][para. 115][para. 116][para. 117][para. 118][para. 119][para. 120][para. 121].