On January 15, the 2026 Global and China Capital Market Outlook Forum was held, bringing together numerous experts to discuss the new logic of wealth and the future of capital markets in the AI era. Tian Xuan, Dean of the National Institute of Financial Research at Tsinghua University and Vice Dean of the PBC School of Finance at Tsinghua University, delivered a keynote speech titled "What Kind of Capital Market Do We Need?". Tian Xuan stated that we need a more "inclusive" venture capital market, a "less active" secondary market, and a well-developed legal environment.
An inclusive venture capital market provides the soil for innovation and trial-and-error. Tian Xuan emphasized that supporting technological innovation primarily requires building a more inclusive venture capital market that tolerates both the unique characteristics of entrepreneurs and the high risks inherent in the innovation process. Citing academic research, he pointed out that super-entrepreneurs often possess "non-mainstream traits" such as being solitary, unconventional, and skeptical; these seemingly negative traits are actually the crucial foundation for achieving "zero to one" innovation from scratch. "For such maverick potential entrepreneurs, we should offer more tolerance and support, even providing capital investment rather than just loans when they start their ventures." From the capital perspective, the core gap between the Chinese and U.S. venture capital markets lies in fund duration and LP structure. Tian Xuan indicated that U.S. venture capital funds typically have a lifespan of 10-12 years, with 98% of LPs being patient capital like pension funds and social security funds, which can calmly accompany the growth of early-stage hard tech projects. In contrast, China's venture capital funds have a duration of only 5-7 years, with over 80% of LPs being state-backed entities. Influenced by annual assessments, single-project accountability, and pressure to preserve and increase the value of state-owned assets, these entities exhibit strong risk aversion, making it difficult to truly implement the requirement to "invest early, invest small, invest in hard tech." He cited top-tier journal research findings to support this, showing that the higher the lead VC's tolerance for failure, the better the quality and quantity of innovation from the portfolio company after its IPO.
A "low-activity" secondary market safeguards long-term innovation resilience. Regarding the secondary market, Tian Xuan proposed a "less active" development philosophy, with the core aim of avoiding excessive short-term speculation and volatility, thereby guiding the market to focus on long-term value. He noted that China's capital market involves the vital interests of approximately 700-800 million investors. Following the Politburo meeting in July 2023, the strategic importance of the capital market has continued to rise, but excessively high market activity can conversely impose short-term performance pressure on corporate innovation. "Listed company executives are constantly affected by stock price fluctuations, making it difficult to maintain long-term innovation resilience; this creates a binary paradox with the long-cycle, high-risk nature of technological innovation." How to shape a "low-activity" secondary market? Tian Xuan outlined four pathways: First, implement strong anti-takeover provisions such as dual-class share structures and staggered boards to stabilize the control rights of listed companies and insulate them from short-term capital interference. Second, moderately control stock liquidity, as excessively high liquidity can easily attract "corporate raiders" and short-term speculators; research shows this may lead to an 11% decline in corporate innovation output. Third, cultivate long-term institutional investors who, by focusing on core business operations and optimizing resource allocation, can achieve a V-shaped reversal in R&D efficiency. Fourth, optimize information disclosure and analyst tracking mechanisms, suggesting extending financial reporting cycles to six months to alleviate short-term performance pressure on companies and create space for innovation.
Legal safeguards: Building a solid institutional foundation for innovation. Tian Xuan regards improving the legal environment as a crucial cornerstone for the capital market's support of innovation. Citing cross-national research data, he pointed out that the level of investor protection is positively correlated with corporate R&D investment, investment efficiency, and company value, with robust bankruptcy systems and intellectual property protection systems being key supports. "Top entrepreneurs are often serial entrepreneurs, typically needing to go through 2-4 ventures to succeed. If they become mired in debt after their first failure, they lose the possibility of innovating again." To address this, Tian Xuan called for accelerating the introduction of a personal bankruptcy law targeting business natural persons, exempting reasonable debts of failed entrepreneurs so they can return to normal economic life and restart their ventures. He revealed that Shenzhen and Xiamen have already introduced local personal bankruptcy regulations, and there is an urgent need to elevate this to national legislation. Simultaneously, he emphasized regulating the misuse of valuation adjustment mechanisms to avoid the excessive constraints of unlimited joint liability on entrepreneurs. Furthermore, strengthening intellectual property protection was mentioned as an important institutional guarantee for stimulating corporate innovation motivation.
Tian Xuan concluded that an inclusive venture capital market, a steady secondary market, and a sound legal environment form a synergistic "combination punch." Only through this set of institutional designs can financial resources truly flow to the innovation frontier, helping China achieve technological self-reliance in international competition and injecting sustained momentum for high-quality development during the "16th Five-Year Plan" period. The following is the PPT: