Last week, Chinese President Xi Jinping announced the launch of the Beijing Stock Exchange. Unlike Beijing’s existing equity market, this new exchange will be specifically geared towards raising money for smaller tech companies.

President Xi’s decision to open a new equity market comes at a time when Chinese companies are finding it increasingly difficult to raise money in US equity markets. This is because both Chinese and American government authorities are questioning the traditional listing strategy used by Chinese companies to sell equity in the US.

The launch of the Beijing Stock Exchange is a signal to young Chinese entrepreneurs and tech companies that opportunities to raise capital can be found domestically and comes just three years after President Xi’s announcement of a Science and Technology Innovation Board whose purpose is to compete with the Nasdaq in attracting larger tech companies.