Abstract:Some enterprises in China are suffering from low competitiveness because of low level of mechanization, out-of -date equipment, and poor technology. Technical innovation is of paramount importance for such enterprises. However, technical innovation is seriously hindered by shortage of owned capital, too high ratio of liabilities to assets, lack of policy guidance, inability of benign circulation for invested capital, inflexible system of science and technology, and imperfect policies of human resources. The author points out that clearly defined investment institutions, rational financial policies and expanded fund raising channels are favorable for technical innovation in enterprises.