OREANDA-NEWS. February 21, 2013. The reforms and liberalization starting in the late 1970s have allowed China to undergo a remarkable transformation from a centrally-planned economy to a more market-oriented economy, reported the press-centre of PBC.

The increasing sophistication of the Chinese economy and the reform of state-owned enterprises (SOEs) have called for more accommodating fi nancial systems. China’s capital markets began to emerge against this backdrop. As China’s market economy has evolved, there has been an increasing demand for a more market-oriented approach towards resource allocation, leading to the gradual establishment and development of China’s capital markets.

In retrospect, China’s capital markets have gone through three phases of development since the introduction of the reform and opening-up policy:

Phase I: From early 1978 to 1992, China initiated full-scale economic reform. China’s capital markets began to emerge in response to the incorporation process of Chinese enterprises.

Phase II: From 1993 to 1998, with the establishment of China Securities Regulatory Commission (CSRC) as a key milestone; China consolidated the supervision of capital markets. The regional pilot programs were expanded nationwide, and national capital markets began to emerge and evolve.

Phase III: From 1999 to 2007, with the promulgation of the Securities Law as a key milestone; the legal status of China’s capital markets in the economy was formalized and strengthened, and a series of major reforms were implemented to facilitate further development of the capital markets. This historical review shows that the emergence and evolution of China’s capital markets can be seen both as a cause and a result of the economic development and reforms of the past two decades.

The capital markets have become one of the driving forces behind a series of important
economic and social reforms, and their contribution to and influence on China’s economic and social development have grown steadily. Over time, they are becoming a dynamic component of China’s financial system and increasingly embracing more market-oriented principles, establishing more market disciplines and adopting international best practices.

Full report see here: http://www.pbc.gov.cn/image_public/UserFiles/english/upload/File/china%20capital%20market%20report.pdf