SHANGHAI—The Chinese government on Friday unveiled a pilot plan to encourage qualified companies in select industries to float shares on its domestic stock market, paving the way for the country’s technology giants to list at home.

Overseas-listed Chinese companies in advanced technology sectors with market capitalizations of at least 200 billion yuan ($31.9 billion) can return to China’s yuan-denominated stock market by selling shares or issuing financial instruments called Chinese Depositary Receipts, according to a statement...