On December 6-7, the 19th Summit Forum of Top 100 Chinese Listed Companies and the 5th Forum on Comprehensive Development of Top 100 Cities were grandly held in Shanghai. 7 a.m. Zheng Xinli, Chairman of the Summit Forum of Top 100 Chinese Listed Companies and former Deputy Director of the Policy Research Office of the Central Committee of the Communist Party of China (CPC), delivered a keynote speech titled "Analysis of China's Unicorn Quantity Winning the Championship" at the opening ceremony of the Forum, which is the full text of the speech as follows.

Good morning, gentlemen and ladies!

According to the 2019 global unicorn list release news, the world as of the end of June this year, the valuation of more than 1 billion U.S. dollars in the ranking of science and technology startups, on the list of a total of 494 unicorn enterprises, the founding time of more than ten years, to achieve the U.S. stock listing, the 494 unicorn enterprises are distributed in 24 countries, the average founding time is in seven years, the average valuation is in the 23.9 billion yuan, the The total valuation is 11.8 trillion RMB.

In this list of unicorns, five of the top seven are from China, including the top three, including Ant Gold Service, Drop Travel, according to the city, the largest city is Beijing, with 82 unicorns, the second place is San Francisco with 55, we are third in Shanghai, with 47, New York has 25, Hangzhou, 19, Shenzhen, 18, Nanjing, with 12, the unicorns are concentrated in These unicorns are concentrated in 12 areas, including e-commerce, financial technology, cloud computing, artificial intelligence, health technology, media and entertainment, software and services, life sciences, big science, and new energy vehicles, all of which are concentrated in the new economy.

Achievements in the development of unicorn enterprises in China

From the unicorn list we see how some interesting things, the first shows that China over the years we encourage innovation and entrepreneurship, has made obvious achievements. In the past, unicorn companies were concentrated in the U.S. These years, China's unicorn companies have grown very fast, and the fact that they have been able to take the global gold medal in terms of quantity itself shows that our country has made rapid progress in science and technology innovation. Our country from the 17th Party Congress put forward to improve the ability of independent innovation, building an innovative country as a national development strategy, the 18th Party Congress put forward to build an innovative country, and finally we put forward innovation and other new concepts of development, the past decade or so, our investment in research and development has increased rapidly, in particular, the central government put forward to encourage innovation and entrepreneurship of these policies, deeply rooted in people's hearts, mobilized the government at all levels, Enterprises and researchers have been mobilized, so we have made such an achievement, which is a reflection of our increasing efforts in scientific and technological innovation in the past ten years.

Secondly, it shows that our domestic venture capital industry is playing an increasingly important role in China's scientific and technological progress and the development of science and technology-based enterprises. These unicorn companies are all backed by venture capital firms and private equity funds, and have not yet gone public. Venture capital and private equity funds used to be a shortcoming in our country's financial sector. Over the years, we have summed up our experience and made significant progress in the development of direct financing, especially venture capital, to support the development of science and technology-based enterprises and the industrialization of scientific and technological achievements. So unicorns are also a witness to the rapid development of venture capital in China.

The third illustrates that our Chinese market to support the scale of the advantages began to emerge, this year China's total market sales may exceed the United States, China's total market consumption and services can exceed the United States in the past the world's first position. Its significance is far greater than our total GDP over the United States, because we are now GDP is equivalent to more than 60% of the United States, the United States of America's GDP inside the arms accounted for a large proportion of this thing can not be eaten or used, in addition to the proportion of the financial sector is also relatively large. So we China's total market consumption this year can get the world's first position, the size of this huge market to support the development of our unicorn enterprises, the advantages of this scale began to emerge.

China's unicorn enterprise development deficiencies

At the same time, our own analysis, the development of our unicorn enterprises, there are still many shortcomings. Compared with the United States, most of our unicorn enterprises rely on the advantage of scale, and rely on e-commerce and other development in the circulation area. Unicorn enterprises founded and developed by scientific and technological innovation are still far behind the United States, so we still need to learn from the United States in terms of innovation, especially through our technological innovation to set up new innovative enterprises and develop them into unicorns.

Secondly, nearly 19 of our unicorns are nurtured and incubated by large enterprises that have divested part of their business. For example, Ant Financial Services is a piece of Alipay business from Alibaba divested developed, we played the role of large enterprises, science and technology innovation enterprises incubation, which shows that we are in the development of venture capital, there is still a lot of potential, but also to learn from the United States. More than 400 unicorn enterprises, Sequoia Capital in the United States has invested in and supported 1/5 of the enterprises, and it is recognized that Sequoia Capital has a unique vision, including the top few companies in Silicon Valley in terms of market capitalization, all of which are invested by Sequoia Capital, and Sequoia Capital has given certain support to the development of China's unicorn enterprises. China is still short of venture capital firms like Sequoia Capital. Therefore, although our venture capital has developed to a certain extent, there is a big gap between us and the United States, and we don't have venture capital firms like Sequoia Capital yet. Nor do we have investment firms like Softbank Global Fund, whose mission is to support the best companies in the world to develop into unicorns. At the same time, we are going to short 200 companies that don't do well, and if the companies we backed don't do as well as the ones we shorted, we're going to change our business, which means that we're not adapted to venture capital. We still lack such companies in China. I think China should develop some investment companies like Sequoia and Softbank to industrialize our innovative achievements, from angel fund, seed fund, from VC to PE and finally to GEM to go public, forming a complete industrial chain of venture capital, and as soon as possible, we apply for these patents, especially invention patents, engineering and industrialization, to cultivate a batch of unicorns, and then cultivate into large-scale enterprises in the market. and then cultivate them into large-scale enterprises in the market.

Thirdly, we analyze the existing problems, we are still not balanced in the distribution of cities, especially in some big cities where educational resources, talent resources and scientific and technological resources are more concentrated, such as Wuhan, Xi'an, Shenyang, these big cities are more densely populated with universities and more academicians, but this time, there is no name on the unicorn network, which shows that if we can learn from Beijing, Shenzhen and Shanghai, these cities will be able to Emphasis on innovation and the development of venture capital, their potential can be realized. The number of unicorn companies will further increase rapidly.

San Francisco Bay Area as a whole, there are more than 200 large and small cities, the Bay Area unicorn enterprises have 102, in the world is still the most concentrated, the most intensive place, so we have to learn from the Silicon Valley, Silicon Valley is the unicorns are the most concentrated, but also the results of the most concentrated place of engineering and industrialization of the technology, we have to learn from the Silicon Valley.

Now that we have so many unicorns, how to cultivate the many unicorns into multinational corporations of hundreds of billions or trillions of dollars, how to integrate the unicorns, how to make the domestic stock market bigger and stronger, how to mobilize capital through the domestic stock market, through our Shanghai and Shenzhen stock exchanges, and how to cultivate these unicorns of ours into multinational corporations of hundreds of billions or trillions of dollars, this is an urgent task we are facing at present. This is an urgent task we are currently facing, and at the same time it is also a major opportunity for us.

These unicorns can be said to be good seedlings on the stock market, growing very strong, the prospects for development are very good, good seedlings should be injected into the Chinese stock market this fertile soil, so that it grows, bigger and stronger. We can no longer send these good seedlings in China to the market in New York, the current listing of our Ali in New York, Tencent listed in Hong Kong, in fact, with the help of overseas stock markets to make the market bigger, which is dishonorable to the managers of our Shanghai and Shenzhen two cities. How to make them bigger in China's stock market, to share the profits brought, and at the same time, with the help of these profits, the Chinese stock market bigger, stronger and more stable. This is an issue that the managers of China's capital market should take seriously.

Suggestions for the future development of our unicorn enterprises

I would like to make a few suggestions, first of all, our listed enterprises must increase the value of the enterprise as the highest goal of the operation, since the enterprise is listed, we should be responsible for the investors, responsible for the shareholders, so that the people who invested in your pockets bulge, to enhance the value of the enterprise. In the past, we have increased our value to Guizhou Maotai 1.5 trillion market value, how do we high-tech enterprises bigger and stronger, in high-tech enterprises to cultivate a number of high-value companies like Guizhou Maotai. This is the test of our ability to do our best to make the price of the enterprise bigger and bigger, so that the people who buy our shares are not disappointed, and to make the enhancement of enterprise value as the highest goal of the operation of listed companies.

The second one is to establish a modern enterprise system with Chinese characteristics, and to make listed companies form a mechanism conducive to development and growth through the development of mixed ownership enterprises and the implementation of employee shareholding system. The Third Plenary Session of the 18th CPC Central Committee put forward the reform of our state-owned enterprises to absorb private capital into the shares, develop into a mixed ownership system, and establish a modern enterprise system on the basis of the standardized shareholding system. The 19th CPC Central Committee also put forward the establishment of a modern enterprise system with Chinese characteristics, and the development of mixed ownership enterprises, the proportion of state-owned shares should not be less than 33%, and the proportion of employees' shareholding should be no more than 10% of the total share capital. The proportion of state-owned shares is not less than 33%, that is, you can form a diversified checks and balances of the shareholding structure, in the past, always have to consolidate the statements no one cares about you, and now form a reasonable shareholding structure. The proportion of employees is not more than 10%, is also a good number of boundaries, first of all, our management backbone, outstanding employees to hold shares, to the enterprise executives with golden handcuffs, you are in office and leave within a few years are not allowed to realize, so that desperately want to make the company better, the executives of the enterprise and the enterprise to form a community of interest, community of destiny, so that we can do a good job of the enterprise. Allow mixed ownership of enterprises to implement employee shareholding, which is complementary, complementary to the reform of employee shareholding, the salary of our executives is only a relatively small income, employee shareholding and mixed ownership reform, so that we have adopted the management of the shareholding of the state-owned enterprises to solve the problem of income of executives.

And in the future, there will be more and more mixed ownership enterprises, to dilute the concept of state-owned and private. We have both state-owned and foreign shares, and we can't say whether it's a state-owned enterprise or a private enterprise, but all of them are shareholding enterprises. In the future, China will also be more and more mixed ownership enterprises, to play the advantages of hybridization, a variety of ownership of enterprises combined together, standardized shareholding-based modern enterprise system, so that we will be able to thrive in the stock market like a fish out of water.

The third is to guide listed companies to increase investment in research and development, to become innovative enterprises, focusing on the long-term income of enterprises, rather than immediate benefits. Huawei did not go public, ZTE went public, ZTE went public, every year after taking part of the money to increase R & D investment, our shareholders said that this year's dividend is less, the enterprise's competition does not work, forcing enterprises in the R & D investment dare not rest assured that bold investment. Huawei is not listed, not subject to market opinion of the wrong interference, the annual R & D investment accounted for more than 15% of sales revenue, last year Huawei's investment of more than one hundred billion, more than the Chinese Academy of Sciences, put one hundred billion invested in such a specialized field. In the future, our listed companies, our stock appraisers, our securities companies to guide enterprises to increase R & D investment, which a listed company R & D investment, our stock appraisers say that the company has hope, so through our guidance, encourage our listed companies to increase R & D investment as much as possible, to create a number of innovative companies like Huawei, so that we have hope.

The fourth is to establish a stock market regulatory system and a financial transparency system to ensure the stable development of the stock market. Our unicorns are a direct opportunity for the development of our stock market and for China's direct financing, and we need to take advantage of this opportunity to accelerate the development of China's stock market, to cultivate this batch of unicorns into trillion-dollar conglomerates, and to enhance our country's overall competitiveness, thank you!

(Arranged by the Walton Economic Institute based on the audio recording of Zheng Xinli's speech)