The administrative committee of GuangzhouDevelopment District, an emerging industrial center in South China's Guangdongprovince, has launched new measures to encourage local high-tech companies towiden their financing channels with intellectual property rights.

The measures, which took effect on May 17,will strengthen the use and protection of IP, allowing any high-tech company inthe district to pledge their IP as collateral for funds from banks, small-loancompanies or financial leasing companies. The companies that do so will havetheir assessment fees, guarantee fees and insurance fees refunded viagovernment subsidies valued at up to 100,000 yuan ($14,070) for each item.

The government will also subsidize capitalrepayments and interest annually to the tune of 3 percent, capped at 1 millionyuan, for no longer than a year.

"The fiscal support is much biggerthan before," said Lan Weifeng, director of the district's IPadministration, in a news briefing last week. "We also set up new awardsto promote IP securitization."

In September 2019, 11 small andmedium-sized high-tech companies in the district received financing of 3million to 45 million yuan by leveraging expected patent licensing fees of 103invention patents and 37 utility model patents from a securitization product atShenzhen Stock Exchange.

"It's significant for a company likeus on a fast-growth track that needs consistent financial input. IP can be usedas a major channel for funds," said Xiang Xianqing, deputy general managerof Huayin Health.

According to the new measures, the issuerof invention IP securitization products is eligible to an award of no more than6 million yuan, of which 10 percent can be used to reward its executives andstaff.

Companies that successfully raise capitalfrom IP securitization can also receive a 3 percent subsidy on interestpayments for no more than three years, or up to 2 million yuan annually.

"The new arrangement can solve thefinancing problems of small and medium-sized high-tech enterprises andencourage them to develop more patents," Xiang said.

The new measures also encourage IP serviceagencies to develop in the district. If annual revenues of new agencies reachthe targets of 10 million yuan, 50 million yuan and 100 million yuan, they canreceive corresponding one-off rewards of 1 million yuan, 5 million yuan and 10million yuan.