A-share valuations remain at a relatively low level. Li Ming, Vice Chairman of the China Securities Regulatory Commission, recently highlighted six key points

From May 19 to 20, the 2025 Global Investors Conference, hosted by the Shenzhen Stock Exchange, was held in Shenzhen. Themed "New Quality Productive Forces: New Investment Opportunities in China – Shenzhen's Open and Innovative Market," the conference attracted nearly 400 representatives from domestic and overseas exchanges and asset management institutions. The event showcased the investment value of Chinese assets and the A-share market through various formats.

At the conference, Li Ming, Vice Chairman of the China Securities Regulatory Commission (CSRC), stated that in recent years, the CSRC has resolutely implemented the important deployment of the CPC Central Committee and the State Council to promote high-level financial opening-up. It has advanced the two-way opening-up of markets, products, and institutions, continuously enhancing the convenience and stability of cross-border investment and financing. Currently, the market capitalization of A-shares held by various types of foreign investors has stabilized at around RMB 3 trillion, making them an important participating force in the A-share market.

Regarding key issues such as the value of China's economy and A-share investors, the vitality of publicly listed firms, and the commitment to opening up the capital market, as well as the future policy direction of the capital market, six major points in Li Ming's speech are worth noting.

The first point is about long-term investment. Since the beginning of this year, medium and long-term funds, including those from social security, insurance, and annuities, have cumulatively net purchased over RMB 200 billion worth of A-shares, reflecting the formation of a virtuous cycle where medium and long-term funds are accelerating their inflows while the stock market remains stable with moderate growth.

The second point is about A-share listed firms. Since 2024, over 90% of newly listed companies have been high-tech enterprises, indicating a continuous improvement in the technological prowess and innovative momentum of A-share listed firms.

The third point is about returns to investors. In 2024, A-share listed firms distributed a total of RMB 2.4 trillion in dividends and repurchased RMB 147.6 billion worth of shares, both hitting record highs. More and more companies are distributing dividends multiple times a year, with the dividend yield of the CSI 300 Index approaching 3.6%.

The fourth point is about A-share valuations. The price-to-earnings ratio of the CSI 300 Index stands at 12.6, significantly lower than major indices in overseas markets, further highlighting its allocation value.

The fifth point is about the opening-up of the capital market. China's capital market will remain steadfast in its opening-up efforts. The CSRC will strengthen the top-level institutional design for opening-up in accordance with the deployment requirements of institutional opening-up, focusing on promoting the compatibility and interoperability of rules, regulations, management, and standards, so that institutions can better play a fundamental role in advancing two-way opening-up, anchoring the foundation and benefiting the long term.

The sixth point is that policies and measures to deepen the reform of the Science and Technology Innovation Board (STAR Market) and the ChiNext Market will be introduced. These will provide more suitable and inclusive institutional support for the innovative growth of enterprises. The CSRC will continue to guide listed firms to actively enhance their investment value through methods such as cash dividends, share repurchases and increases, mergers and acquisitions, and restructuring, continuously cultivating a group of high-quality and dynamic listed firms to provide more quality investment targets for global investors. In addition, mechanisms such as the Qualified Foreign Institutional Investor (QFII) scheme will be optimized to support eligible foreign institutions in applying for new businesses and launching new products.

Investing in China means greater certainty.

Li Ming introduced the value of investing in China from the perspectives of China's economic fundamentals and capital markets.

He stated that amid the backdrop of a slowing global economic growth, China has consistently emphasized both expanding domestic demand and opening up, accelerating the construction of a new development paradigm, and remained a major contributor to global GDP growth. This year, China's GDP achieved a strong start in the first quarter, demonstrating robust resilience. In recent years, a series of policy measures aimed at advancing the construction of a unified national market, expanding domestic demand, safeguarding people's livelihoods, and preventing and mitigating risks in key areas have yielded remarkable results.

Turning to the capital markets themselves, Li Ming noted that since last year, the new "State Council's Nine-Point Plan" and the "1+N" policy framework have been gradually implemented, with regulatory enforcement and investor protection efforts continuously strengthened. Key initiatives, such as the influx of medium and long-term funds into the market and the reform of publicly offered funds, have been advancing in depth, and the market ecosystem is being improved at an accelerated pace. With the continuous deepening of comprehensive reforms in investment and financing in the capital markets, the inherent stability of China's capital markets will be further enhanced.

"In particular, the central government attaches great importance to strengthening the reserve of strategic forces and the construction of market stabilization mechanisms. The stabilization model, with the Central Huijin Investment Ltd. playing a role akin to a 'stabilization fund' at the forefront, the People's Bank of China providing strong support from behind, and other parties collaborating, has greatly enhanced the confidence and capability of the capital markets to respond to various risks and challenges in complex environments," Li Ming said. From a global perspective, at a time when stability has become a scarce resource, a more resilient Chinese economy and a more robust A-share market will provide irreplaceable investment opportunities for global investors.

Since the beginning of this year, medium and long-term funds, including those from social security, insurance, and annuities, have cumulatively net purchased over 200 billion yuan worth of A-shares, reflecting the formation of a virtuous cycle where the accelerated inflow of medium and long-term funds coincides with the steady rise of the stock market.

The valuation level of A-shares remains relatively low.

Currently, the A-share market boasts over 5,000 publicly listed firms, covering various sectors of the national economy. This is a vivid portrayal of China's comprehensive industrial categories and its accelerated transformation and upgrading.

Li Ming stated that in the face of multiple pressures, the performance of A-share listed companies has generally maintained resilience, with three-quarters of the companies achieving profitability and half of the enterprises sustaining profit growth. Two aspects of change are particularly noteworthy.

First, the technological prowess and innovation momentum of A-share listed companies are continuously improving. Among the companies newly listed since 2024, high-tech enterprises account for over 90%. A batch of leading enterprises have rapidly emerged in fields such as advanced manufacturing, digital economy, and green and low-carbon sectors, standing out in global competition and attracting widespread attention from global investors. Publicly listed firms are demonstrating strong innovation momentum. In 2024, the total R&D expenses of physical publicly listed firms reached 1.6 trillion yuan, up 3.1% YoY. Over 800 publicly listed firms had an R&D intensity exceeding 10%.

"Recently, we will also introduce policy measures to deepen the reform of the Science and Technology Innovation Board and the ChiNext Market, providing more suitable and inclusive institutional support for the innovative growth of enterprises," Li Ming stated.

Secondly, publicly listed firms are placing greater emphasis on rewarding investors. In 2024, A-share publicly listed firms distributed a total of 2.4 trillion yuan in dividends and repurchased shares worth 147.6 billion yuan, both hitting record highs. An increasing number of enterprises are distributing dividends multiple times a year. The dividend yield of the CSI 300 Index is approaching 3.6%, further enhancing the stability and predictability of returns to investors.

Li Ming emphasized that the current valuation level of A-shares remains relatively low, with the CSI 300 price-to-earnings ratio at 12.6, significantly lower than the major indices of overseas markets, highlighting the increased allocation value. Recently, the China Securities Regulatory Commission (CSRC) issued the revised "Administrative Measures for Major Asset Restructuring of Listed Companies," strengthening support for asset restructuring of publicly listed firms. Going forward, we will continue to guide publicly listed firms to actively enhance their investment value through cash dividends, share repurchases and increases in holdings, mergers and acquisitions, and restructuring, continuously cultivating a group of high-quality and dynamic publicly listed firms to provide more high-quality investment targets for global investors.

Four Focuses to Strengthen the Pace of China's Capital Market Opening-up

In recent years, the CSRC has actively expanded cross-border connectivity, comprehensively removed foreign ownership restrictions in industry institutions, and continuously expanded the range of futures and options varieties that foreign institutions can participate in trading. A series of measures have achieved positive results.

Li Ming stated that China's capital market opening-up will remain resolute. We will, in accordance with the deployment requirements for institutional opening-up, strengthen the top-level institutional design for opening-up, and advance the pace of opening-up by focusing on the compatibility and interoperability of external systems, transparency, systematicness, and multilateral cooperation.

Specifically, firstly, we will focus on promoting the compatibility and interoperability of rules, regulations, management, and standards, allowing institutions to better play a fundamental role in advancing two-way opening-up that stabilizes the foundation and benefits the long term.

Secondly, we will focus on enhancing the transparency and predictability of institutions, improving communication mechanisms with international investors, further enhancing the quality and efficiency of overseas listing filing management, optimizing institutional arrangements such as qualified foreign institutional investors, supporting eligible foreign institutions to apply for new businesses and launch new products, and continuously improving the cross-border financial services system.

Thirdly, we will focus on enhancing the systematicness of opening-up, strengthening the coordination of opening-up in the stock, bond, and futures markets, increasing the supply of internationalized futures and options varieties, and enriching tools for asset allocation and risk management.

Fourth, we will focus on strengthening bilateral and multilateral cross-border regulatory cooperation, actively participating in the formulation of international standards and rules, further enhancing cooperation between the mainland and Hong Kong markets, and consolidating Hong Kong's status as an international financial center.

Li Ming stated that foreign investors are important participants and contributors to China's capital market. He hoped that global investors would offer valuable insights and share beneficial experiences to jointly create a market ecosystem where various types of funds are "willing to come, able to stay, and can thrive."