1. Wu Qing, chairman of the China Securities Regulatory Commission, stressed at the 2026 Financial Street Forum that a capital market cannot thrive without investor trust in its rules, calling for a market that balances investment and financing while strengthening resilience and delivering better returns to investors. [para. 1][para. 2]
2. The emphasis on protecting small and mid-sized investors is particularly important because they account for the overwhelming majority of participants in China’s capital market and are among its most active traders, yet many lack professional research capabilities and have limited capacity to absorb losses, making them more susceptible to market sentiment and short-term price swings. [para. 3][para. 4]
3. China has introduced a series of protective measures in recent years, and the task now is to build on them by establishing a stable investment environment with clear rules while broadening investment channels. Public expectations are high, with more than 200 million stock investors and more than 700 million fund investors in the country. [para. 5][para. 6][para. 8]
4. Despite progress from registration-based share issuance reforms and strengthened oversight, serious shortcomings remain: listed company quality is uneven, disclosures are often inadequate, improper related-party transactions persist, some companies falsify financial results to secure listings, and a small minority of controlling shareholders treat listed companies as assets to be plundered. [para. 9][para. 10][para. 11]
5. Wu outlined four forthcoming measures, including establishing a fund-industry operations monitoring center to register private-fund interests, collect information on public and private funds, and monitor risks—particularly important given that misconduct continues to disrupt the private equity and venture capital sectors. Regulators also plan to improve penalties for improper share disposals and issue guidance on advance compensation. [para. 13][para. 14][para. 15]
6. Enforcement alone is insufficient; investor protection also requires continued development of a multi-tiered capital market with deeper, broader offerings that allow people with different risk preferences to find suitable investments. Policy should encourage private-equity and venture-capital funds, strengthen the multilevel bond market, and expand science-and-technology innovation bonds, green bonds, REITs, and asset securitization. [para. 16][para. 17][para. 18]
7. Wu announced approval of the first 18 actively managed exchange-traded funds, and outlined efforts to make investment operations more convenient under the Qualified Foreign Institutional Investor program, encourage more foreign institutions to invest in China, support cooperation on indexes and Chinese-asset-based products, implement a new mainland–Hong Kong cooperation framework, and accelerate inclusion of yuan-denominated stock-trading counters and REITs in the Hong Kong Stock Connect programs. [para. 19][para. 20][para. 21]
8. The article concludes with an old Chinese saying—"For a tree to grow tall, its roots must be firm; for a stream to flow far, its source must be kept clear"—arguing that protecting small investors requires both rigorous law enforcement and determined development of a deeper, more diverse market, with investors expecting regulatory commitments to become effective measures without delay. [para. 22][para. 23]
AI generated, for reference only
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