Guosen Securities stated that China's capital market is expected to make progress in three key areas during the 14th Five-Year Plan period (2026-2030):
- Strengthen market stability: Raise standards for listed companies, encourage long-term institutional investment, and enhance market resilience.
- Support economic growth and innovation: Reform China's multi-level capital market system to channel more financial resources to emerging industries and other fields related to the development of new productive forces, thereby enhancing the capital market's ability to serve the real economy.
- Strengthening regulation: Promote stricter regulatory enforcement and further open China's capital market to international investors in order to protect the rights and interests of investors, while also enhancing the market's attractiveness to global investors.
Guosen Securities stated that by achieving a balance between stability, reform, and effective regulation, China's capital market is expected to play an increasingly important role in the country's modernization process and create broader opportunities for international investors to participate in China's economic development.
Strengthen market stability and resilience
Guosen Securities stated that market stability is the foundation for the effective operation of the capital market and its service to economic development.
During the 15th Five-Year Plan period, China is expected to accelerate the reform of investment and financing mechanisms, improve the matching between capital supply and financing demand, and strengthen long-term arrangements aimed at maintaining market stability. Key measures will include raising the standards for listed companies, deepening market-oriented reforms related to mergers and acquisitions and corporate restructuring, as well as broadening exit channels for market participants. Guosen Securities stated that these measures are designed to create a more efficient market environment with orderly market entry and exit, stronger competitive constraints, and more sustainable valuations.
China also plans to strengthen the regulatory and institutional framework to support long-term institutional investment. This will include addressing obstacles that limit the participation of medium- and long-term institutional investors, such as social security funds, insurance companies, and financial management funds. The reforms will also focus on establishing a performance evaluation framework that reflects longer investment periods and encouraging patient capital, thereby creating more favorable conditions for sustained investment in the capital market.
Guide capital flow towards the real economy and new productive forces
Guosen Securities believes that the capital market plays an important role in financing the development of new productive forces and strengthening financial support for the real economy.
During the 14th Five-Year Plan period, China is expected to continue to promote high-quality development, while deepening the reform of a multi-level capital market system that covers stocks, bonds, and futures. These reforms will aim to make the market system more inclusive, better able to meet the financing needs of different industries and enterprises, and at the same time direct capital and other production factors towards areas related to new productive forces, including artificial intelligence, biomedicine, clean energy technology, aerospace, and quantum technology.
These measures are aimed at enhancing China's technological capabilities and self-reliance, promoting the modernization of industrial foundations, and accelerating the commercialization of scientific and technological innovation achievements. Guosen Securities stated that by improving the financing channels for innovative enterprises and emerging industries, China's capital market is expected to serve the development of new productive forces and a broader real economy more effectively.
Strengthen supervision and expand access to international markets at the same time.
In the view of Guosen Securities, effective regulatory enforcement is crucial for maintaining market stability and supporting the long-term development of China's capital market.
In recent years, Chinese regulatory authorities have adopted a zero-tolerance attitude towards securities violations, increased the penalties for such offenses, and strengthened investor protection. These efforts are aimed at enhancing market transparency, fairness, and integrity.
During the 15th Five-Year Plan period, China plans to further strengthen an investor-centered regulatory framework by updating securities laws and regulations, expanding the use of technical means in market activity monitoring, and enhancing over-the-counter monitoring and on-site inspections. These measures will focus on improving the ability to detect securities violations and ensuring more effective law enforcement, including actions against fraudulent issuance, financial reporting fraud, illegal share reductions, and other acts that violate securities laws and regulations.
China is expected to continue to open up its capital market to international investors through further institutional reforms and improvements in cross-border market connectivity. These measures are aimed at enhancing the attractiveness of RMB-denominated assets to international investors and promoting greater participation of foreign capital in China's capital market.
