Shanghai Stock Exchange‘s Reform Path: Market Upgrades, Institutional Innovation, and Global Integration
The Shanghai Stock Exchange (SSE) has undergone profound structural and regulatory reforms during the 14th Five-Year Plan period, transforming itself into one of the world's most active and diverse capital markets. Today, the SSE ranks as the world's third-largest stock market, operates the largest exchange-based bond market, and hosts Asia's second-largest ETF market — milestones that reflect its growing importance in global finance.
Over the past five years, the SSE has significantly strengthened its direct financing capacity. Total IPO proceeds rose by 16% compared to the previous planning period, while total bond issuance reached RMB 31 trillion, up 42%. The exchange has also played a leading role in developing the REITs market, with 51 initial listings and four follow-on offerings raising RMB 140.5 billion — nearly 70% of the national total.
To better support innovation-driven industries, the SSE introduced “sci-tech innovation bonds” and specialized SME bonds, channeling more than RMB 1.5 trillion in financing to over 400 technology firms and RMB 19.7 billion to small and micro enterprises.
TWO
The STAR Market has become a focal point of China's capital market reform, supporting the listing and long-term growth of high-tech and strategic enterprises. Nearly 70% of newly listed companies during the period were innovation-oriented firms.
R&D investment by SSE-listed companies grew from RMB 640 billion to RMB 1.07 trillion — a 66% increase — accounting for roughly 40% of total national corporate R&D spending.
The exchange has also refined its listing system to accommodate unprofitable but high-potential enterprises, companies with special equity structures, and red-chip issuers. This inclusive framework has accelerated the formation of complete industry clusters in semiconductors, biomedicine, and high-end equipment.
THREE
To promote market stability and investor returns, the SSE has encouraged listed companies to enhance dividend policies and long-term value creation. Between 2021 and 2025, listed companies distributed RMB 7.32 trillion in cash dividends, representing a 51% increase from the previous period.
The SSE has expanded its index and ETF ecosystem — the total market value of ETFs rose from RMB 900 billion to RMB 4 trillion, supporting greater participation from institutional and long-term investors. Index innovation, including the launch of sci-tech bond ETFs and options on the STAR 50 and CSI 500 indices, has further diversified investment tools available to the market.
FOUR
The SSE has expanded cross-border capital access through multiple connectivity mechanisms. Shanghai-Hong Kong Stock Connect trading volume surged to RMB 99 trillion during the period — a 275% increase over the previous five years. The inclusion of stock ETFs in the Connect scheme and new ETF links with Hong Kong, Singapore, and Brazil have strengthened the exchange's role as a bridge between China and global investors.
Ten SSE-listed companies have issued Global Depositary Receipts (GDRs) abroad, raising over USD 3.3 billion. The total value of SSE cross-border index products has exceeded RMB 320 billion, reflecting rising international participation and confidence.
FIVE
Maintaining a transparent and disciplined market environment remains central to the SSE's strategy. Nearly 800 disciplinary measures were imposed during the period, over 30% of which involved severe penalties such as public condemnation. The exchange took “zero-tolerance” action against financial fraud, fund misappropriation, and illegal shareholding reductions, while improving its delisting mechanism to ensure market integrity — 93 companies were delisted, including 70 through forced removal.
The SSE also enhanced its investor education and protection framework through initiatives such as “I Am a Shareholder” and “Visiting SSE.” More than 6,000 educational events were organized, along with 1,600 interactive programs between investors and listed companies.
At the same time, the exchange streamlined over 130 regulatory documents, cut fees by RMB 4 billion, and introduced fully digitalized service systems — enabling over 500 business functions online and mobile access to shareholder voting, which expanded investor participation elevenfold.
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