At the 2026 Boao Forum for Asia, Jin Luo, Vice Chairperson of the National Council for Social Security Fund (NCSSF), delivered a sharp critique of the current bottlenecks stifling China’s private equity and venture capital ecosystem. Speaking at a session focused on long-term value investment, Jin emphasized that the vitality of the market depends heavily on improving the 'exit' phase of the investment lifecycle, which has historically been a weak link in Chinese finance.
Jin argued that while Initial Public Offerings (IPOs) remain a prestigious milestone, they can no longer be the sole exit strategy for long-term capital. To foster a sustainable environment for innovative small and medium-sized enterprises (SMEs), China must urgently diversify its capital markets. Drawing on international benchmarks, Jin pointed out that mergers and acquisitions (M&A) are just as critical as IPOs and should be treated as a primary, rather than secondary, path for liquidity.
Central to this proposed reform is the enhancement of fund share transfer mechanisms, often referred to as the secondary (S-fund) market. By allowing institutional investors to trade stakes in private funds before they reach maturity, the NCSSF aims to unlock stalled capital and improve the circulation of 'patient capital.' This shift is intended to reassure investors that long-term commitments do not necessarily mean permanent illiquidity in a volatile market.
The push for these reforms comes at a time when China is pivoting its economic engine toward 'New Quality Productive Forces.' For state-backed giants like the NCSSF, which manage trillions in retirement and social welfare assets, the ability to exit mature investments is crucial for recycling capital into the next generation of high-tech and strategic industries. Jin’s remarks signal a high-level policy shift toward building a more sophisticated, multi-layered capital market that prioritizes functional liquidity over mere market scale.