A record number of companies have dropped plans to list on Shanghai’s tech-focused stock market, with regulators raising the bar for initial public offerings in order to pick out domestic champions that can help Beijing’s drive towards technological self-sufficiency.Public records show 126 companies have cancelled or suspended IPO applications on Shanghai’s Star Market so far in 2023, more than in the previous four years combined.

The city’s stock exchange, acting on guidance from regulators led by the China Securities Regulatory Commission (CSRC), has set higher standards for listing applications this year, according to bankers and filings, in what amounts to a radical reversal in China’s approach to encouraging innovation.

Companies must now not only turn a profit but also explain in hundreds of pages how their technology is on par with, if not better than, industry leaders and whether their business model is sustainable before getting the IPO green light.