Stable mechanisms, strict regulation, and strong attraction: Outlook on the core direction of China's capital market during the 14th Five-Year Plan

Author: Zhu Hua, Head of Research Department, Jianghai Securities Co., Ltd.

On March 6, 2026, Chairman Wu Qing of the China Securities Regulatory Commission disclosed data at the Fourth Session of the 14th National People’s Congress, including that the total market capitalization of A-shares exceeds 110 trillion yuan, revenue of 5,400 listed companies surpasses half of GDP, and strategic emerging industries account for 45% of the CSI 300 index components. These figures showcase the development achievements in China’s capital market in terms of scale and structure. Meanwhile, Chairman Wu Qing further outlined several development directions for China’s capital market during the 14th Five-Year Plan period, including improving the market stabilization mechanism with Chinese characteristics, precisely cracking down on malicious illegal activities in the market, and continuously enhancing China’s asset attractiveness. I believe these guidelines will become the core focus of capital market development in the coming years, promoting resilience and vitality through reforms in institutional foundations, ecological environment, and opening-up, thereby better serving the real economy.

Chairman Wu Qing stated, “During the 14th Five-Year Plan period, we will improve the market stabilization mechanism with Chinese characteristics, enrich cross-cycle and counter-cyclical adjustment tools and mechanisms, and enhance the market’s inherent stability.”

Improving the market stabilization mechanism with Chinese characteristics is an inevitable choice for the capital market to adapt to China’s high-quality economic development. By implementing various cross-cycle and counter-cyclical adjustment measures, the market’s stability will shift from passive response to proactive shaping. As a globally recognized economic barometer, the stability of the capital market directly affects its core functions. The construction of a Chinese-characteristic stabilization mechanism draws on international best practices while focusing on the domestic market dominated by retail investors and aligning with macroeconomic regulation. Practical results show that, according to a September 2025 State Council Information Office briefing, the annualized volatility of the Shanghai Composite Index decreased by 2.8 percentage points during the 14th Five-Year Plan compared to the 13th Five-Year Plan, indicating initial validation of the mechanism’s effectiveness. Looking ahead to the 15th Five-Year Plan, as the stabilization adjustment mechanisms are enriched, domestic policy defenses will become clearer, and irrational market fluctuations are expected to continue declining. Additionally, as the stabilization mechanism integrates deeply with medium- and long-term capital inflow channels, market volatility reduction will likely attract patient capital such as social security and insurance funds, forming a virtuous cycle of long-term funds and market stability, solidifying the intrinsic foundation of the A-share market, and providing long-term institutional support for the effective functioning of the capital market’s investment and financing roles.

Chairman Wu Qing stated that targeted, effective crackdowns on malicious illegal activities such as financial fraud, market manipulation, and insider trading, along with continuous improvement of investor rights protection systems, will effectively enhance investors’ sense of gain.

Cracking down precisely and effectively on financial fraud, market manipulation, insider trading, and other illegal activities is crucial for maintaining fairness and justice in the capital market, improving the investability of listed companies, and protecting investors’ legal rights. The healthy development of the capital market relies on authenticity and fairness; illegal behaviors like financial fraud not only severely damage the market ecosystem but also shake investor confidence, reduce resource allocation efficiency, and weaken market effectiveness. I believe that, with the goal of enhancing investors’ sense of gain and improving investor protection, regulatory authorities during the 15th Five-Year Plan period will maintain a high-pressure, precise enforcement stance. This includes focusing on authenticity to promote corporate governance, dividend payments, and share repurchases, thereby improving the investment value of domestic listed companies and stabilizing investor returns from the source. Simultaneously, efforts will continue to improve investor rights protection systems through landmark rulings and pre-emptive compensation mechanisms, genuinely enhancing investors’ sense of gain. Ultimately, this will help high-quality enterprises stand out, activate the merger and acquisition market, facilitate resource allocation, and foster the growth of more world-class companies.

Chairman Wu Qing stated that the increasing diversification of international investors’ asset allocation needs has significantly boosted China’s asset attractiveness. The CSRC will further promote two-way opening in markets, products, services, and institutions to reach new heights.

I believe that the significant increase in China’s asset attractiveness during the 14th Five-Year Plan period results from the dual effects of high-quality development and deeper opening-up, directly reflecting China’s economic resilience and industrial upgrading achievements. Currently, the total market capitalization of A-shares exceeds 110 trillion yuan, with revenue of 5,400 listed companies surpassing half of GDP, making the A-share market effectively one of the core hubs for high-quality assets domestically. In terms of asset structure, strategic emerging industries account for 45% of the CSI 300 index components. The accelerated concentration of leading innovative productivity over recent years has endowed China’s capital market with unique industrial innovation advantages, making it an important part of global capital diversification. I believe that future reforms in related systems will further address practical issues in cross-border investment and financing, promote efficient allocation of domestic and foreign capital, and gradually develop China’s capital market into a global high-value capital hub.