(Yicai) July 22 -- Requirements for China's capital market regarding refining the factor market system and rules, deepening the financial institution reform, and steadily expanding institutional opening-up were put forward in the resolution on further deepening reform comprehensively to advance Chinese modernization adopted by the 20th Central Committee of the Communist Party of China at its third plenary session.

Efforts will be made to refine the role and governance of financial institutions, improve the functions of the capital market with balanced investment and financing, and improve the financial regulatory system, the resolution showed yesterday.

"The plenary session made explicit arrangements to comprehensively further capital market reform," the China Securities Regulatory Commission said on July 19. The resolution is a guiding document for further comprehensively deepening reform on a new journey, it added.

In terms of serving new quality productive forces and supporting scientific and technological innovations, requirements such as 'cultivating patient capital' were also raised in the resolution.

In terms of deepening the financial system reform, the committee put forward 'developing diversified equity financing, speeding up the development of multi-level bond markets, and increasing the proportion of direct funding."

The committee proposes to "prevent risks and tighten regulation to promote the sound and stable development of the capital market, facilitate the entry of long-term capital into the market, and improve the overall quality of listed companies, strengthen relevant regulation and delisting systems, and establish long-term mechanisms to enhance the underlying stability of the capital market."

It further suggests to "improve the mechanisms for regulating and constraining the behaviors of major shareholders and actual controllers. We will optimize dividend incentive and constraint mechanisms for listed companies and improve the mechanisms for protecting investors."

Regarding institutions and mechanisms developing new quality productive forces, the committee proposed improving relevant rules and policies "to accelerate the formation of relations of production that are more compatible with new quality productive forces," and driving advanced production factors "toward the development of new quality productive forces."

In the resolution, the committee also raises the need to enhance financial support to major national scientific and technological strategies and scientific and technological medium and small-sized firms, while making foreign capital's equity and risk investments in China more convenient.

Full text of the resolution of the CPC Central Committee on further deepening reform comprehensively to advance Chinese modernization: https://english.news.cn/20240721/342df6c6e05c4e1a9ce4f6e3b933007b/c.html

Editors: Shi Yi, Martin Kadiev