Founder Securities Sees Capital Reform as Anchor for China's Growth

The push for structural reform aims to transform the capital market into a more effective engine for technological innovation. By streamlining access for hard-tech firms, regulators intend to fuel the development of "new quality productive forces," ensuring that domestic innovation remains self-reliant. Beyond industrial output, officials view a more robust market as a mechanism to boost household wealth, providing a stable source of investment income that can stimulate domestic demand and consumer confidence.

Evidence of this shift is visible in recent market data. Since 2024, the STAR Market, ChiNext, and the Beijing Stock Exchange have captured over 70% of all A-share listings. Simultaneously, long-term capital participation has surged; the market value of A-shares held by institutional investors—including insurers and social security funds—has grown by 85%, with net purchases reaching 1.3 trillion yuan. Furthermore, shareholder returns have hit new milestones, with cash dividends and buybacks totaling 2.68 trillion yuan in 2025.

Looking ahead, Founder Securities suggests that the next phase of reform will focus on expanding the pool of "patient capital" and refining stabilization frameworks. By strengthening cross-agency risk resolution and fostering an ecosystem that rewards long-term holding, China aims to create a buffer against external shocks. Maintaining this internal stability remains a cornerstone of the country's broader financial security strategy as global geopolitical uncertainty persists.