Taking a strategic, structured approach to the development of its capital markets now matters more to China than ever before. Its legacy growth model has reached its limits. For many years, China’s growth was driven by industrial expansion, property development, and a bank-centric financial sector. Under that legacy model, China’s stock market has remained anaemic, volatile and often disconnected from the country’s stellar, sustained economic growth.
China is building a stronger, more stable and more strategic capital market as part of its next stage of development. One of the aims is to transform the equity market into a tool that can support technological upgrading, provide households with an alternative to excessive reliance on property, and strengthen China’s financial autonomy in an era of geopolitical rivalry.
To effectively harness its multi-year, DeepSeek-inspired bull market, China is deliberately managing a gradual and sustainable rise in stock prices — driven by dividend payouts, share buybacks and the strengthening of regulatory tools and enforcement — and, in the process, increasing investor confidence.
