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Because of the difficulties small—to-mid-sized technology companies encounter in trying to get loans because of potential risks, Beijing's Zhongguancun area has decided help them tackle the problem through a financial services system related to intellectual property rights (IPR).
The developers are the China Technology Exchange and the State-owned Properties Investment & Management Co, in the Haidian district, which have created a system that handles intellectual property evaluation, guarantees, and investment, with backing from the State Intellectual Property Office and the Haidian government.
Technology company assets are a form of intellectual property but not easy to evaluate in China, explained Xu Xiangyang, vice-president of the Technology Exchange, who went on to say that the Zhongguancun system's goal is to change that and help small—to-mid-sized companies get financial support faster and cheaper. Xu describes the system as an open platform where intellectual property of all kinds of companies can be evaluated, financed and traded, with many banks, surety companies and investors taking part.
If a company applies for financial help, its intellectual property will be evaluated by the Technology Exchange and the State Intellectual Property Office so that surety and fund companies can provide credit based on their findings. If the borrower has difficulty making payments on the loan, the lenders will become shareholders and, after the loan is paid off, they can choose to either remain as shareholders or sell their shares. The trading system provides a site for both tangible and intangible assets.
