China’s Dual-Sided Capital Market Reform: Strengthening Assets and Long-Term Capital
ISSUING AUTHORITY:
China Securities Regulatory Commission
DATE OF ISSUANCE:
July 28, 2025
China’s securities regulator has outlined the next phase of capital market reforms at its mid-year 2025 meeting, shifting from a “capital market function” to a “factor-based” perspective, with reforms targeting both the asset and funding sides.
On the asset side, the focus is on enhancing the quality and investment value of listed companies by tightening listing/exit standards, accelerating the removal of underperformers, and promoting high-quality IPOs, particularly in strategic emerging industries. M&A will be further leveraged to improve existing issuers, while strict enforcement will curb abuses.
On the funding side, reforms aim to expand long-term, patient capital—such as pensions and insurance—through larger allocations and extended performance assessment cycles, encouraging value and long-term investing.
These dual reforms are designed to reinforce each other, fostering a healthier market ecosystem, channeling capital efficiently to quality assets, and supporting the real economy’s transformation and upgrading.
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