Robust, open capital market critical asset

China's journey to becoming a financial powerhouse must start with institutional reform and the establishment of a transparent, innovation-driven capital market, experts said.

Wu Xiaoqiu, former vice-president of Renmin University of China and dean of the university's National Academy of Financial Research, said the capital market plays a fundamental role in supporting the real economy and driving technological innovation.

"Capital markets are not just financing platforms," he said at a financial forum in Beijing. "They are mechanisms that reward innovation, efficiently distribute resources and drive technological progress."

Wu outlined three key priorities for capital market reform during the upcoming 15th Five-Year Plan (2026-30) period — strengthening the market's innovation function, improving the overall market ecosystem, and enhancing institutional credibility through greater openness and transparency.

He said a robust capital market system is essential for China to advance toward becoming a financial powerhouse, particularly as the country continues its transition to high-quality development.

Wu also highlighted that financial modernization must be rooted in an inclusive and forward-looking culture. Citing the 2025 Nobel Prize in Economics, which recognized research on innovation-led growth, he said, "Innovation thrives in societies that tolerate risk and encourage originality, and policy design should reflect that principle."

He called for a comprehensive overhaul of the capital market ecology.

On the assets side, he said listed companies must deliver genuine profitability and technological value. On the funding side, institutional investors and pension funds should play a greater role in providing stable, long-term capital. And on the rules side, regulators must build transparency and enforce accountability with real teeth.

"China's capital market reform is not only a domestic necessity but also a contribution to the stability and diversity of the world's financial system."

Zhu Xiaoneng, Party secretary at the School of Finance at Shanghai University of Finance and Economics, said that digitalization is reshaping how markets operate and how institutions must adapt.

"China's capital market is entering a new stage driven by digital transformation. Just as mobile payments changed how people live, digital assets and stablecoins are beginning to redefine the logic of market operations," Zhu said, adding that the integration of digital finance — from blockchain to tokenized assets — will require not only technological infrastructure but also forward-looking regulation and institutional flexibility.

"Digital finance isn't just a trend. It's becoming the foundation for the next generation of capital markets."

Against this backdrop, Wu Weixing, president of Capital University of Economics and Business, highlighted the global headwinds affecting capital flows. He said that financial globalization has slowed considerably since 2008, with rising protectionism and geopolitical tensions reshaping the investment landscape.

"For decades, integration defined the world economy. Now we're seeing the opposite — fragmentation, regionalization and more complex capital barriers. Global capital markets are no longer converging into one system. Instead, we're seeing multiple centers emerging, with technology, trust and transparency determining who leads the next financial cycle," Wu said.

Experts believe that China's continued reform and opening-up of its financial sector — combined with efforts to enhance corporate governance and legal protections — will play a pivotal role in ensuring the country's resilience and competitiveness in this evolving global environment.

Zhang Chenxu contributed to this story.