Investors check stock prices on computers Tuesday at a securities company in Fuyang, Anhui Province. (Photo: CFP)

The Chinese government's emphasis on information disclosure for IPOs for the impending science and technology innovation board shows that this is the most critical factor for the new board to succeed as the country moves away from the approval system, experts said on Sunday. 
They also noted that China is moving its focus from establishing basic capital market mechanisms to solving weaknesses in the domestic capital market by adopting more inclusive and open regulations. The science and technology innovation board is one such reform. 
According to a report by the Xinhua News Agency Friday, the new board must be implemented well, phasing in a registration system with information disclosure as its core, according to a meeting convened by the Political Bureau of the CPC Central Committee Friday.
It was the first time that the new board was mentioned at the political bureau-level, some domestic media reports noted. 
In a guideline released by the China Securities Regulatory Commission (CSRC) in January on the new board, the government said that a strict information disclosure system must be established and implemented rigorously. 
Experts said that disclosure is the first and foremost factor for the new sci-tech board to operate smoothly. 
"In the past, the government decided which companies qualified for listing and which didn't. But with the registration system, investors must decide for themselves which companies are worthy, and all they can rely on to make their decision is corporate disclosures. Information such as company basics and prospectus details must be complete and accurate for investors to examine," said Dong Dengxin, director of the Finance and Securities Institute at the Wuhan University of Science and Technology. 
As of Friday, 89 domestic companies' applications to get listed on the new board had been accepted, according to information disclosed by the Shanghai Stock Exchange on its official website. The conditions for being listed on the new board are not as strict as those for the general market.
The development of scientific and technological innovation, under dual support from the government and the market, comes as China is trying to reform its capital market by enhancing its marketization and internationalization levels. 
China must stimulate the healthy development of domestic capital market with "innovation in key systems," government officials said at the meeting, according to Xinhua.  
According to Dong, the government used to emphasize the creation of a multi-faceted capital market and the establishment of the basic systems for the market. But with those goals mostly achieved, it is moving on to solving major problems such as the absence of institutional investors and long-term capital participation. 
"The way to achieve these goals is to enhance the inclusiveness and openness of the domestic capital market. The new board is one of those key innovations," Dong said. 
Xi Junyang, a professor at the Shanghai University of Finance and Economics, said that regulations involving the registration system and new board are becoming increasingly mature. "It just needs a market test. If that is successful, it can be replicated to other boards," he said. 
Don said the government is also opening the capital market via such means as stock links to bring in long-term capital. "The government is using different methods and channels, and there has been some impact like the speeding inflow of overseas institutional capital," he said. Fang Xinghai, vice-chairman of the CSRC, said on Sunday that China will promote the establishment of futures companies with overseas investors as controlling shareholders, thepaper.cn reported.