The normalization of initial public offerings (IPOs) in China could help raise the financing efficiency of companies and direct more capital into the real economy, experts have said.

Since an IPO suspension between July and November 2015, the country’s securities regulator has progressively sought to normalize IPOs.

In 2016, 227 companies went public, raising total funds of 147.6 billion yuan (21.42 billion U.S. dollars).

Sun Yizheng, vice president of China Merchants Securities, said that most companies waiting for IPO approvals were excellent players in emerging industries, and their entry into the stock market would raise the quality and optimize the structure of listed companies.

Sun said that IPO normalization would solve the accumulation of companies on the waiting list, and thus raise the efficiency of their financing through the stock market.

As directing capital into the real economy was a basic function of the stock market, all qualified companies should enjoy the equal right of getting financing from the market, said Yang Jiongyang, president of Sichuan-based Huaxi Securities.

Quickening the pace of IPOs and enhancing investigation of companies on the waiting list will be conducive to guiding more private funds to the real economy and promoting the country’s economic restructuring, according to analysts.