China's capital market poised for major expansion in next five years

Continued efforts will be made to further improve the quality of the Chinese capital market and expand its size during the 15th Five-Year Plan (2026-30) period, Wu Qing, chairman of the China Securities Regulatory Commission, said during a news conference on Friday.

The market mechanism and ecosystem facilitating long-term investment and the inflow of long-term capital will be further refined. Equal importance will be attached to the completion of a market stabilization mechanism with Chinese characteristics and enriching counter-cyclical means and mechanisms to further improve market resilience, according to Wu.

Equity financing will be more diversified and multiple exit channels for private equities and venture capitals will be explored. The bond, real estate infrastructure trusts and asset securitization markets will further mature in order to better serve new quality productive forces with more products and tools, he added.

While international investors have expressed increased demand for diversified asset allocation, the appeal of Chinese assets has risen significantly. Against that backdrop, China will further facilitate cross-border investment and financing, and advance the two-way opening-up for products and service providers, according to Wu.

During the 14th Five-Year Plan (2021-25) period, the Chinese capital market achieved much progress in terms of size, structure and quality, seeing its resilience and risk resistance significantly strengthened. The stock market, serving as an increasingly important economic indicator, has played a key role in stabilizing employment, companies' operations and market expectations, he said.

Over the past five years, the total value of equity and bond financing in major Chinese exchanges reached 64 trillion yuan ($9.3 trillion), among which 5.9 trillion yuan was contributed by equity financing. The proportion of direct financing increased to 31.97 percent, up 3.2 percentage points from the previous five-year period. These figures reflect the profound structural changes and enriched investment and wealth management tools provided to investors, said Wu.

At present, the total market value of the A-share market has exceeded 110 trillion yuan. The combined annual revenue of 5,400-plus A-share companies accounts for over half of the country's GDP. On top of that, enterprises in strategic emerging industries make up 45 percent of the constituent stocks of the benchmark CSI 300 Index. In addition, the circulating market value of A shares held by medium and long-term funds, including mutual funds, social security, annuities and insurance, has increased by more than 50 percent, added Wu.