China’s capital market has become a core force in supporting economic transformation. Since the 20th National Congress of the Communist Party of China, reforms have accelerated, guided by the Party Central Committee with Xi Jinping at its core. Measures such as the STAR Market, the rollout of the registration-based system, and the new “Nine-Point Guidelines” have reshaped market structure and strengthened long-term development.

Growth in Scale and Better Market Structure

During the 14th Five-Year Plan, the market expanded steadily while improving its quality. By August 2025, the A-share market value exceeded 100 trillion yuan, and listed companies rose to more than 5,400. Direct financing reached 30.6% of total social financing by the end of 2024, continuing to rise.

Technology has become a central driver. From 2021 to mid-2025, over 90% of new listings were technology or high value-added firms. By June 2025, technology-related sectors accounted for more than a quarter of total market value, surpassing finance and real estate combined. This reflects the market’s growing support for new productive forces.

Deeper Institutional Reform

The new Securities Law and a series of regulations have strengthened the legal foundation of the market. Since 2020, twelve major laws and more than thirty supporting rules have been revised or introduced, forming a more complete framework.

The new “Nine-Point Guidelines” issued in 2024 pushed reforms further. By August 2025, authorities had released dozens of supporting rules, building a comprehensive policy system that upgrades market institutions and regulatory logic.

The registration-based system now covers all major boards. Listing standards have been refined and on-site inspections strengthened, improving company quality from the outset and reinforcing market-oriented principles.

Serving the Real Economy More Effectively

Supporting the real economy remains the market’s core purpose. Policies targeting technology and green development have redirected capital toward strategic areas. High-tech firms now account for more than 90% of listings on the STAR Market, ChiNext and the Beijing Stock Exchange. Green corporate bond issuance has reached 865 billion yuan.

From 2021 to August 2025, stock and bond financing totaled 56.8 trillion yuan, with technology enterprises receiving more than 40% of funds. Private equity has also become a major source of early-stage capital; by mid-2025, private equity funds managed 20.26 trillion yuan, with most investments directed toward unlisted technology companies.

Better Regulation and Stronger Investor Protection

Strict supervision has reinforced market discipline. During the 14th Five-Year Plan, authorities issued more than 2,200 administrative penalties, significantly increasing fines and strengthening deterrence against fraud and market manipulation.

Investor protection systems have advanced. Representative litigation and standardized judgments have improved legal remedies. By mid-2025, 42% of listed firms had established investor relations systems. From 2021 to 2024, companies returned 10.6 trillion yuan to investors through dividends and buy-backs, far exceeding funds raised through IPOs and refinancing.

Delisting has become routine, creating healthier market circulation. More than 190 companies exited between 2021 and 2025, resulting in clearer quality differentiation.

Higher Level of Opening-Up

Opening-up remains a defining feature of China’s capital market. Since 2020, foreign ownership limits in securities, fund and futures firms have been fully removed. 11 wholly foreign-owned securities firms and 9 wholly foreign-owned fund companies now operate in China.

Connectivity mechanisms continue to expand. By August 2025, 907 institutional investors had obtained QFII/RQFII qualifications, and foreign investors held 3.4 trillion yuan in A-shares. Shanghai-Hong Kong Stock Connect, Shenzhen-Hong Kong Stock Connect and Bond Connect have recorded large cumulative trading volumes, offering global investors efficient access.

Chinese companies are also advancing overseas. At present, 267 Mainland enterprises are listed on major global exchanges, including 160 companies with both A and H shares.

Strengthened Risk Prevention and Enhanced Resilience

China has built a coordinated risk-control system combining policy tools, liquidity support and communication. During the 14th Five-Year Plan, the A-share market became more resilient, with volatility lower than in many global markets.

In response to market fluctuations in late 2024, regulators introduced targeted tools including a technological innovation reloan facility and a market stability mechanism. These measures released 200 billion yuan of liquidity and helped stabilize expectations, showing the system’s capacity to manage pressures.

Clear Direction for Future Development

China’s capital market is positioned for continued upgrading. Key national meetings have emphasized improving investment-financing coordination and expanding the role of long-term capital. The CSRC’s “Twelve More” goals outline priorities for the next stage, including a more resilient market, more efficient regulation and higher-level opening.

During the 15th Five-Year Plan (2026–2030), China will advance the development of world-class exchanges, foster competitive investment banks and strengthen institutional investors. Market-oriented and rule-based reforms will continue, along with broader institutional opening-up and enhanced risk-prevention capacity.

A more transparent, open, dynamic and resilient capital market will provide long-term momentum for China’s high-quality economic growth and deliver broader opportunities for global investors.（Author: Liu Zheng, Liu Mintong）

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