Wu Qing, Chairman of the China Securities Regulatory Commission (CSRC), stated recently at the Annual Conference of the Financial Street Forum 2026 that authorities will further improve the long-cycle performance evaluation mechanism tailored for long-term investment, expand the sources, channels and market access methods of medium- and long-term capital, continue to deepen the reform of public offering funds, and strengthen stabilizing forces in the capital market中国证券监....

Interviewees noted that attracting long-term capital and retaining it steadily are two sides of the same coin. The capital market is building a full-chain system for long-term capital and long-term investment covering attraction, accommodation and retention: institutional barriers discouraging long-term investment are removed via long-cycle assessment; product gaps due to insufficient matching instruments are filled through public fund reforms; and safety lines against external risk spillover are secured by market stabilization mechanisms.

Long-cycle evaluation eases concerns over long-term investment

Wu Qing said the CSRC will further refine the long-cycle performance evaluation system suited to long-term investment, and broaden the sources, access channels and investment approaches for medium- and long-term capital.

According to CSRC data disclosed on June 17, more than two years after the rollout of the new Nine-Point Plan for Capital Market Reform, the market value of A-shares held by medium- and long-term capital including social security funds, insurance funds and annuities has risen by 85%, with net purchases of around 1.3 trillion yuan worth of A-shares. Long-term investment forces have kept growing steadily.

Deng Shubin, Chief Economist at Central China Securities, pointed out that medium- and long-term capital serves as the ballast for stable capital market operations. Long-term funds such as social security, insurance and annuities adopt more prudent trading strategies, which can counteract the buy-high sell-low behavior of short-term capital, curb market volatility and boost market resilience. The entry of medium- and long-term capital helps optimize the investor structure, fit the long-cycle growth characteristics of sci-tech innovation enterprises, channel household savings into industrial capital, and support the development of new productive forces.

Su Zhiqiang, head of the Market Research Department at Guoxin Securities, commented that policy focus is shifting from short-term liquidity intervention to fostering institutional capital with counter-cyclical attributes. When public funds, insurance money and pension funds evaluate investment performance on an annual or multi-year basis, they will deliver structural support to curb irrational market swings.

Public fund reform expands investment vehicles to accommodate long-term capital

On October 19, the CSRC approved the registration of the first batch of 18 Active ETFs. Wu Qing remarked that this is a major step forward in innovative fund product development and will bring more incremental capital into the marketState Stre....

Deng Shubin explained that the launch of Active ETFs marks an upgrade in medium- and long-term capital participation: from passive broad-based index allocation to a new model combining active management with standardized, transparent investment vehicles. Active ETFs integrate the value discovery capacity of active stock selection with the strengths of ETFs: high transparency, easy subscription and redemption, and controllable costs. They perfectly match the allocation needs of social security, insurance and annuity funds, making them core investment products for stabilizing capital.

“Active ETFs offer trading convenience alongside active management, which will enrich the toolkit for asset allocation,” said China Merchants Securities. Coupled with optimized assessment rules for insurance and annuity funds and public fund reforms, the equity market will see more sustainable allocation demand.

China International Capital Corporation (CICC) also held that the new arrangement will improve market access conditions for long-term capital including insurance and pension funds and expand sources of incremental market funding. China Merchants Securities added: “Product registration does not immediately translate into net capital inflows, yet a higher share of medium- and long-term capital will reduce market reliance on short-term trading money and improve volatility patterns.”

Market stabilization mechanisms build stronger risk barriers

Wu Qing stressed that the regulator will closely track domestic and global market developments, strengthen risk analysis and policy tool reserves, consolidate and improve market stabilization frameworks, guard against risks arising from new-type businesses, stay highly alert to emerging risks such as leveraged products linked to individual A-share stocks overseas, and continuously reinforce the risk breakwater for the capital market.

“This means risk prevention and control will extend to cross-border emerging risks, while market stabilization mechanisms will cover not only traditional on-site risks but also cross-border derivatives, AI-related risks and other new challenges,” Deng Shubin commented.

China Merchants Securities noted that regulatory thinking has evolved from responding to isolated shocks to regular monitoring, advance policy preparation and cross-market coordination. Previous policy foundations are already in place, including capital injection from Central Huijin Investment and two structural monetary policy tools supporting the capital market. Faced with external shocks, policy responses will become timelier and more targeted, easing liquidity pressure and lowering tail risks in the market.

Ye Fan, Chief Economist at Southwest Securities, said regulators put stability as the top priority: they keep a close watch on cross-border, cross-market and cross-industry risk contagion while drawing in medium- and long-term capital via Active ETFs and long-cycle assessment. This “build the dyke first, then channel the water” approach will endow the market with greater resilience and solid fundamentals.

Source: Shanghai Securities News