Decoding China’s A-Share Market: CSRC Vice Chair Li Ming on Low Valuations and Investor Opportunities

China’s A-share valuation levels are currently presenting what some might see as a compelling entry point.

But what’s the real deal behind these numbers?

Let’s dive into the insights shared by Li Ming (Lǐ Míng 李明), Vice Chairman of the China Securities Regulatory Commission (CSRC), at the recent 2025 Global Investor Conference held at the Shenzhen Stock Exchange (SZSE) (Shēnzhèn Zhèngquàn Jiāoyìsuǒ 深圳证券交易所).

“Opening up to the outside world is a fundamental long-term state policy of China,” Li Ming emphasized.

“Regardless of how the external environment changes, we will always adhere firmly to opening up.”

This sets the stage for a deeper look into why China’s market continues to attract attention.

Currently, the market value of A-shares held by various foreign investors is holding steady at around ¥3 trillion RMB (approximately $414 billion USD).

This makes them a significant force in the A-share landscape.

The belief? As China’s high-quality economic development continues and reforms unlock more vitality, its capital market is set to become an even bigger hub for foreign investment.

This means more chances for global investors to tap into China’s growth story.

Investing in China: The “Higher Certainty” Play

So, what makes investing in China a move with “higher certainty” right now?

Li Ming breaks it down into a few core components.

1. Solid Economic Bedrock

China’s economic fundamentals are a key part of this certainty.

Consider these strengths:

• A complete industrial system.
• Comprehensive infrastructure already in place.
• An chāodà (超大 – super large) market size, offering immense scale.
• Continuously accumulating development momentum.
• A long-term stable social environment.

Even as global economic growth slows, China is doubling down on expanding both domestic demand and its openness to the world.

This strategy is accelerating the construction of a new development pattern.

Proof in the pudding: In the first quarter of this year, China’s GDP grew by 5.4% year-on-year.

That’s a “good start” and demonstrates some serious economic resilience.

China has consistently been a major engine for global GDP growth.

2. Predictable Policy Landscape

Certainty also stems from stable policy expectations.

Under central government leadership, various departments are aligned with scientifically formulated medium- and long-term development goals.

There’s a strong push for consistency in macro policy orientation.

This means policies are designed to work together for tangible results.

Recent policies have already shown significant effects in:

• Promoting the construction of a unified national market (Quánguó Tǒngyī Dà Shìchǎng 全国统一大市场).
• Expanding domestic demand.
• Ensuring livelihoods.
• Preventing and resolving risks in key areas.

3. Capital Market Fortification: Building a More Stable A-Share Environment

Looking at the capital market itself, stability is being actively engineered.

Since last year, significant frameworks like the new “Nine National Provisions” (Xīn ‘Guó Jiǔ Tiáo’ 新’国九条’) and the “1+N” policy system have been rolling out.

What does this mean for investors?

• Regulatory muscle is being flexed: Enforcement and investor protection efforts are continuously strengthening.
• Big money is being encouraged: Key measures like facilitating the entry of medium- and long-term funds into the market are advancing.
• System upgrades: The reform of public funds is being deeply advanced.

The market ecosystem is, as Li Ming puts it, “accelerating its improvement.”

As comprehensive reforms in capital market investment and financing deepen, the inherent stability of China’s capital market is set to be further enhanced.

Here’s a particularly interesting insight from Li Ming:

The central government highly values strengthening strategic force reserves and stabilizing market mechanisms.

A “stable market model” is taking shape.

This model features:

• Central Huijin Investment Ltd. (Zhōngyāng Huìjīn Gōngsī 中央汇金公司) playing a quasi-“stabilization fund” role upfront.
• The People’s Bank of China (PBOC) (Rénmín Yínháng 人民银行) providing strong support from the rear.
• Other parties coordinating their efforts.

This coordinated approach has “significantly enhanced the capital market’s confidence and ability to cope with various risks and challenges in complex environments,” stated Li Ming.

The Value Engine: Why China’s Listed Companies Are Worth Your Attention

According to Li Ming, the “vibrant group of listed companies is the source of value for investing in China.”

These aren’t just any companies; they’re the bedrock of China’s high-quality economic development.

They represent China’s highest-quality enterprises.

Let’s look at the numbers and strategy:

• The A-share market boasts over 5,000 listed companies.
• These companies span all sectors of the national economy.
• This diversity is a vivid portrayal of China’s complete industrial categories and its accelerated transformation and upgrading.

In recent years, the CSRC has firmly grasped that listed companies are the cornerstone of the capital market.

The focus has been on measures to boost their quality and investment value:

• Supporting product and service innovation.
• Standardizing and activating the M&A and restructuring market – making it easier for good companies to grow.
• Urging improvement of governance structures – because good governance equals good business.
• Guiding the enhancement of ESG (Environmental, Social, and Governance) information disclosure quality – meeting global investor demands.
• Implementing market value management responsibilities – aligning company actions with shareholder value.
• Accelerating the survival of the fittest – ensuring a healthy, competitive market.

The Big Question: Are A-Shares Undervalued?

This is where it gets particularly interesting for value-focused investors.

Li Ming’s direct take: “Currently, A-share valuation levels are still relatively low.”

Consider this key metric:

• The price-to-earnings (P/E) ratio of the CSI 300 index stands at 12.6.

How does this stack up globally?

It’s significantly lower than P/E ratios for major foreign market indices.

This, Li Ming argues, “further highlight[s] its allocation value.”

What’s the forward-looking plan?

Li Ming stated, “Moving forward, we will continue to guide listed companies to actively enhance investment value.”

Methods will include:

• Encouraging cash dividends.
• Supporting share buybacks.
• Facilitating M&A and restructuring.

The ultimate aim: “Continuously build a high-quality, dynamic group of listed companies to provide more high-quality investment targets for global investors.”

Opening the Gates Wider: Institutional Reforms to Boost Investor Experience

China isn’t just tweaking things; it’s making structural changes to welcome foreign capital.

“Institutional opening up will create better ecological conditions for investing in China,” Li Ming affirmed.

The CSRC has already notched some significant wins in this area:

• Actively expanded cross-border connectivity (think Stock Connect programs).
• Completely removed foreign ownership restrictions on industry institutions (like securities and fund management firms).
• Continuously expanded the range of futures and options products that foreign institutions can trade.

These measures, according to Li Ming, have “achieved positive results.”

The Roadmap for Future Opening-Up of China’s Capital Market

Don’t expect the pace to slow down.

“The pace of opening up China’s capital market will always be firm,” Li Ming declared.

The CSRC will align with institutional opening-up requirements, focusing on several key areas:

• Strengthening Top-Level Institutional Design:

  The goal is to ensure rules, regulations, management, and standards are compatible and interconnected, promoting smooth two-way opening up.

• Enhancing Transparency and Predictability:

  This involves:

  • Improving communication mechanisms with international investors.
  • Further enhancing the efficiency and quality of offshore listing filing management.
  • Optimizing mechanisms such as Qualified Foreign Investors (QFII).
  • Supporting eligible foreign institutions in applying for new businesses and establishing new products.
  • Continuously improving the cross-border financial service system.

• Boosting the Systematic Nature of Opening Up:

  This means greater synergy between the opening up of stock, bond, and futures markets.

  Expect an increased supply of internationalized futures and options products, enriching tools for asset allocation and risk management.

• Strengthening Bilateral and Multilateral Cross-Border Regulatory Cooperation:

  China plans to actively participate in formulating international standards and rules.

  A key aspect is further strengthening cooperation between mainland and Hong Kong markets, aiming to consolidate Hong Kong’s position as an international financial center.

• Strengthening Top-Level Institutional Design: Ensuring compatible rules, regulations, management, and standards for smooth two-way opening.
• Enhancing Transparency and Predictability: Improving communication, offshore listing filing, QFII optimization, supporting foreign institutions, improving cross-border financial services.
• Boosting Systematic Nature: Greater synergy between stock, bond, and futures markets; increased supply of internationalized products.
• Strengthening Cross-Border Regulatory Cooperation: Participating in international standards, enhancing cooperation with Hong Kong.

Li Ming extended an invitation to global investors:

“We hope that global investors will provide valuable opinions and share beneficial experiences to jointly build a market ecosystem where various types of funds are ‘willing to come, stay, and develop well’ with us.”

The Takeaway: Is China’s A-Share Market Ripe for Investment?

With insights from the CSRC pointing towards low A-share valuations, robust economic fundamentals, and a clear commitment to further opening up and reform, the signals are intriguing.

For investors, founders, techies, and marketers eyeing Asian growth, understanding the nuances of China’s capital market and its evolving landscape is key.

The message from Shenzhen is clear: China is actively working to make its markets more stable, transparent, and attractive to global capital, which could make the current A-share valuation a point of significant interest.

References

• Finance News – Securities Daily
• China’s A-share market resilience highlighted at global investor conference – Global Times
• China’s CSRC courts foreign investors amidst market volatility – Nikkei Asia