Editor's Note: Jimmy Zhu is chief strategist at Fullerton Research. The article reflects the author's opinion, and not necessarily the views of CGTN.

The successful development of German technology companies widely relies on the country's comprehensive financial market and extensive cooperation among different sectors.

The new blueprint for south China's Greater Bay Area and the upcoming new Shanghai tech board are set to follow Germany's example, establishing a new chapter for integration between private firms and the financial market.

Germany, a global innovative leader in technology, has its own comprehensive strategy for incubating its tech companies. Deep integration between Germany's private firms and its capital market not only solves funding issues for these tech companies, but also improves efficiency in daily business operations.

There are thousands of financial institutions in Germany that serve its private sector, including many SMEs. Meanwhile, the German government actively promotes a dynamic business operating environment by optimizing its legal system in order to improve innovation.   

Germany's success at developing its tech sector proves that the integration of a developed financial market into sectors of the real economy is crucial.

Hong Kong, one of the few developed markets in Asia, will set up a financing and investment platform for the Belt and Road Initiative (BRI), while Hong Kong Exchanges & Clearing will develop a spot commodity trading platform in southern China.

The percentage of private companies in south China's Guangdong Province is much higher than in other cities and provinces, so the Greater Bay Area plan reflects the intention of authorities to allow more private forces to participate in the BRI, which primarily involved SOEs in recent years.

Different to those mega-sized state firms, private firms require greater support from financial institutions to kick off projects, and Hong Kong has the greatest advantage in providing those financial services thanks to its open economy, sound legal system and a much wider range of financial products.       

Data show that an increasing number of mainland companies chose to list in Hong Kong last year. Among all Chinese IPOs, Bloomberg data show that the value listed in Hong Kong stocks accounted for 67 percent last year, rising sharply from 13 percent in 2017.

The surge serves as a decent indicator that the financial environment in Hong Kong has become more attractive to Chinese firms based in the mainland. The Greater Bay Area plan is another platform that allows onshore tech companies to access offshore investment or financing instruments through a much simpler process than listing in offshore markets.

Hong Kong's role in the Greater Bay Area shows that authorities are keen to strategize a channel to allow private firms to benefit more from financial markets. Any successful experience could also be applied to other sectors in future, with authorities vowing to lend more support to the private sector recently.

Liquidity for many Chinese tech companies trading in offshore markets is not great, thanks in part to the huge domestic consumer market and growing number of Internet users in China these years, reducing the urgency for many of these Chinese tech brands to gain greater exposure in offshore markets.

As a result, many foreigners have little knowledge of these companies except for the biggest Chinese tech giants. The Greater Bay Area project, together with the upcoming Shanghai technology and innovation board, may be the game changer.

The Greater Bay Area project could offer a one-stop service for companies intending to grow by leveraging both onshore and offshore capital markets. First, the blueprint shows that the south China city of Guangzhou will establish a regional trading center for private equity, property rights and commodities. The Greater Bay Area is an incubator for companies issuing private equity, which plan IPO issuance as an exit strategy.

The regulation and trading rules of the new registration-based Shanghai tech board is likely to align with international markets. The success of the new exchange will largely depend on the governance and quality of each listing member.

If the Greater Bay Area successfully incubates a large amount of tech companies, their ultimate destination is likely to be the Shanghai tech board. Even if some of them decide to go overseas, they will be more familiar with international standards of governance, as well as what information can be used to attract international investors.

Besides that, insurance institutions in the Chinese mainland, Hong Kong and Macao will receive support to develop a cross-border yuan reinsurance business, which is likely to further promote RMB internationalization and enhance legal awareness when Chinese companies go overseas.