The file photo shows a worker counting the Chinese currency renminbi at a bank in Lianyungang, East China's Jiangsu province. (Photo/Xinhua)

Chongqing - To invigorate its capital markets, China will take a raft of measures to promote the market entry of medium—and long-term capital, according to a guideline released by the Central Financial Work Commission and the China Securities Regulatory Commission on Thursday.

Key measures include the development of a market environment that encourages long-term investments, the expansion of public equity funds and supports the stable development of private equity investment funds, refinement of policies and institutions that facilitate the entry of diverse medium and long-term capital.

Tian Lihui, director of the Institute of Finance and Development at Nankai University, told news portal Jiemian that the guideline aims to encourage the capital market to accept more medium—and long-term funds, including social security funds, insurance funds, and wealth management products.

Due to their stable sources and higher levels of investment professionalism, medium, and long-term funds can overcome short-term market fluctuations and serve as the cornerstone for the healthy and stable development of the capital market. Such funds can be invested through the capital market to share the benefits of the steady growth of listed companies and the national economy, achieving long-term preservation and appreciation of value, the Securities Daily analyzed.

Tian said this guideline can optimize the market ecosystem, promote the development of public funds, and better attract more medium—and long-term funds into the market.

"Improving the quality of listed companies, encouraging share buybacks and increases, and cracking down on illegal activities can create a healthier and more transparent market environment that attracts long-term capital. By enhancing investment research capabilities, diversifying investment products, and lowering fees, we can increase the appeal of public funds and encourage long-term investment. Establishing a long-term evaluation mechanism and improving investment policies for long-term funds such as insurance capital and pension funds will encourage these funds to invest for the long term."

Ma Quansheng, chief strategist at Fullgoal Fund, told Securities Daily that the signal to promote the entry of medium and long-term funds into the market is transparent and beneficial for boosting market confidence. It directly improves expectations for stock market liquidity and helps enhance the investment returns for ordinary investors. In the future, the entry of medium and long-term funds will drive market maturity and internationalization, further improving the high-quality development of the capital market and enhancing investors' sense of gains.

Zhao Xijun, co-director of the China Capital Market Research Institute at Renmin University of China, said to Jiemian that it is particularly important to establish a relatively complete, systematic, and standardized investment system for the entry of long-term funds into the market.

According to Zhao, the guide will have a positive and far-reaching impact on the capital market, attracting medium—and long-term funds for value investing, increasing the scale and proportion of medium—and long-term investments, optimizing the structure of market investors, and strengthening the foundation for the stable operation and healthy development of the capital market.