A view of the Lujiazui area in Shanghai Photo: VCG

The attractiveness and inclusiveness of domestic capital markets should be further enhanced, according to the meeting held on Wednesday by the Communist Party of China Central Committee Political Bureau, which analyzed and studied the current economic situation and made arrangements for economic work in the second half of this year, the Xinhua News Agency reported.  

The capital market plays a vital financing and investment role in the economy, significantly affecting overall economic growth, and with proactive and specific measures from the top meeting, China's capital market is expected to show a strong upward trend in the second half of the year, Xi Junyang, a professor at the Shanghai University of Finance and Economics, told the Global Times on Thursday. 

Potential measures for enhancing attractiveness and inclusiveness may include promoting mergers and the restructuring of listed companies, enhancing information disclosure, easing foreign capital access, streamlining cross-border investment procedures, improving corporate quality and encouraging consistent cash dividends, economists at China Minsheng Bank, led by Wen Bin, said in a note sent to the Global Times. 

Speaking on possible moves to promote inclusiveness, Xi said that lowering financing thresholds for small, medium-sized and less profitable enterprises will broaden their financing channels and cut costs, while fostering their growth, boosting investment and jobs, and significantly driving economic progress.

Hu Qimu, a deputy secretary-general of Forum 50 for Digital-Real Economies Integration, stressed the importance of propelling the real economy with targeted policies as a critical role for promoting the capital market. 

China's capital market performance in the first half hinged on robust support for the real economy, driving better investor returns via policy backing. As a key resource allocator, an efficient capital market accelerates high-quality economic growth and cultivates new quality productive forces, Hu said, adding that a stronger real economy boosts China's global capital appeal, reinforcing the market's stability and safe-haven attributes.

Wednesday's Politburo meeting noted that macro policies should be continuously strengthened and intensified in a timely manner, while stressing implementing and refining a more proactive fiscal policy and a moderately loose monetary policy. It also stressed that high-level opening-up should be expanded to stabilize the fundamentals of foreign trade and investment, Xinhua reported. 

To enhance China's capital market appeal, improving listed companies' quality is essential. This requires encouraging institutional investors, such as insurance funds and private equity funds, to increase equity holdings, while also attracting foreign capital inflows and redirecting domestic household savings toward the market, Yang Delong, chief economist at Shenzhen-based First Seafront Fund, told the Global Times on Thursday. 

As for enhancing the domestic market's attractiveness to global capital, both Xi and Hu highlighted China's advantages in yuan internationalization, high-quality opening-up, and large market potential. Both expect more facilitating policies to be rolled out and optimized. 

The yuan's rising international status and convenience for foreign use attract investment. Its stability compared with other major currencies allows investors to hold yuan assets without significant losses from fluctuations, enabling market returns while minimizing exchange rate risks, making it an appealing option, Xi said. 

Hu noted that China has leveraged its vast market size and industrial scale to attract substantial foreign capital, while a sizable market reduces transaction costs, making investments viable. To further encourage foreign participation, China has introduced policies to streamline involved procedures. 

Multiple foreign institutions have revised up their outlook for China's economic growth. In the latest move, the IMF on Tuesday lifted its forecast for China in 2025 to 4.8 percent, up 0.8 percentage points compared with its forecast in April. 

Last week, the China Securities Regulatory Commission (CSRC) held a meeting to deploy work tasks for the second half of 2025, focusing on key aspects such as stabilizing the recovery momentum, deepening reforms to spur market vitality, strengthening supervision and risk prevention and promoting high-level institutional opening-up. 

For instance, the meeting proposed to promote reforms of the Sci-Tech Innovation Board, implement comprehensive measures to deepen ChiNext board reform, advance bond and futures products as well as service innovation, and foster the coordinated development of onshore and offshore markets to expand cross-border capital market cooperation, the CSRC said in a statement.