stock market Photo:VCG
China’s securities watchdog said on Friday that it will encourage capital market support for strategic industries such as artificial intelligence (AI) and aerospace, including helping with listings for tech firms that have made breakthroughs in core technologies.
The China Securities Regulatory Commission (CSRC) announced 18 measures in an action plan for the capital market to support five key areas: technology finance, green finance, inclusive finance, pension finance, and digital finance.
The CSRC said the support would include the issuance of real estate investment trusts (REITs) for projects in new infrastructure such as AI, data centers, smart cities, and tech innovation industrial parks, as well as helping with the digital transformation of traditional infrastructure.
The plan outlines a series of measures in areas including enriching the supply of green financial products in the capital market, increasing the efficiency and effectiveness of servicing inclusive finance, and offering diversified pension financial products.
It emphasizes the need to focus on building a system and mechanism that supports comprehensive innovation and the development of new quality productive forces, strengthens the institutional inclusiveness and adaptability of the capital market, and strengthens the capital market’s role in boosting innovation and optimized resource allocation to help advance Chinese modernization, Zhou Xiaozhou, a spokesperson for the CSRC, said on Friday.
Chinese stock markets rose on Friday, with the benchmark Shanghai Composite Index up 1.01 percent at 3,303.67 points, and the Shenzhen Component Index closing 1.75 percent higher at 10,576 points. The ChiNext Index, tracking China’s Nasdaq-style board for growth enterprises, gained 2.53 percent to close at 2,174.35 points.
The combined turnover covered by the two main indices reached 1.96 trillion yuan ($273.37 billion), up from 1.55 trillion yuan the previous trading day. Stocks in the electronic information and medical equipment sectors led the gains.
Leading US bank Goldman Sachs forecast gains of 14 percent year-on-year for the MSCI China Index by the end of 2025, saying the gains could be as high as 28 percent, in a note published on Tuesday.
The recent launch of DeepSeek R1, among other Chinese AI models, demonstrated Chinese tech companies’ ability to develop globally competitive AI models. Brighter growth prospects and the potential for productivity gains aided by technology breakthroughs should help narrow the valuation gap between leading US and China tech/semiconductor stocks, according to the research note.
An Yun, deputy general manager of Schroders Fund Management, said China’s equity valuations remain attractive, and the economic fundamentals are expected to sustain mild recovery. There is also plenty of growth potential for the proportion of Chinese assets in global investment portfolios, An said.
China is intensifying moves to channel long-term funds into its capital market as part of the efforts to boost investor confidence and enhance market stability. On January 22, Chinese financial authorities unveiled a plan to encourage medium- and long-term funds into the capital market to further stabilize stock performance.
“Along with stepped-up policy strength, investor confidence will gradually recover. This will boost households’ deposits into the capital market, which will bring more incremental capital,” Yang Delong, chief economist at Shenzhen-based First Seafront Fund, told the Global Times on Friday.
At the start of 2025, AI and humanoid robots have been two leading sectors in the A-share market. Looking ahead, the A-share market may exceed many investors’ expectations, Yang said.
