"Inception, Inheritance, Pivoting and Synergy": Overview of SSE's Reform and Development During the "14th Five-Year Plan" Period

During the period of the "14th Five-Year Plan", guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, Shanghai Stock Exchange (SSE) thoroughly implemented the decisions and arrangements of the Party Central Committee and the State Council. Under the overall guidance of China Securities Regulatory Commission (CSRC) and the strong supervision of the Discipline Inspection and Supervision Office at the CSRC, the SSE, together with all market participants, has stayed committed to the primary task of high-quality development, aligned itself with the national agenda of economic and social development, and steadily pursued the goal of building a world-class stock exchange. As of today, the SSE runs the world's third-largest stock market, the world's largest exchange bond market, and the second-largest ETF market in Asia, with its options ranking among the world's most actively products of the same kind.

"Inception" - Fostering New-Quality Productive Forces

Driven by major reforms including the establishment of the STAR Market, the pilot registration system and its subsequent full-on implementation, an institutional framework supporting the listing and long-term development of high-tech enterprises has taken shape, marking a new chapter in serving the country's high-level technological self-reliance and fostering new-quality productive forces. Higher "technology density". Over the five years, the proportion of sci-tech innovation companies listed on the SSE rose from 32% to 41% by number, and from 27% to 32% by market value. Nearly 70% of newly listed companies during this period were sci-tech innovation enterprises. A number of leading technology enterprises have grown from scratch into important support for national strategies; traditional and pillar enterprises have also developed new-quality productive forces tailored to local conditions, providing strong foundation for the economy through industrial upgrading. The number of SSE-listed companies in industries such as integrated circuits, biomedicine, high-end equipment, and new energy has nearly doubled compared with the "13th Five-Year Plan" period. Among them, 140 integrated circuit enterprises have formed a complete semiconductor chip industrial chain; 224 biomedicine enterprises have made the STAR Market the world's third-largest listing destination for biomedicine companies; 260 high-end manufacturing enterprises and 61 new energy enterprises have become leaders and backbones driving growth in emerging fields. Growing innovation momentum. In five years, R&D investment of SSE-listed companies increased from 640 billion yuan to 1.07 trillion yuan, representing a 66% increase and accounting for nearly 40% of the total R&D investment of enterprises nationwide; nearly 300 national science and technology awards were won by SSE-listed companies. STAR Market companies have accumulated 120,000 patents, with a median R&D to revenue ratio of 12.6%, continuing to lead all A-share sectors. Significantly enhanced institutional inclusiveness: During the period of the "14th Five-Year Plan", the SSE fully implemented reform policies such as the "STAR Market Eight Measures" and the "1+6" reform policies for the STAR Market Growth Tier. The STAR Market added 376 new listed companies, including 37 unprofitable enterprises, 6 enterprises with special equity structures, 4 red-chip enterprises, and 13 enterprises applying the fifth set of listing standards. Among them, 22 enterprises which were non-profit-making when listing have turned profitable, accounting for over 40%. Of the 20 enterprises listed under the fifth set of standards, 19 have launched core products, 16 have reported over 100 million yuan in revenue, and 4 have reported over 1 billion yuan in revenue.

"Inheritance" - Ensuring A Well-functioning Market

To ensure the capital market is well-functioning, consistency matters as well as innovation. Strengthening functions, cementing foundations, making use of existing assets, and ensuring coordinated functioning of investment and financing have always been the SSE's overarching guideline during the "14th Five-Year Plan" period. Effectively stimulating direct financing. During the "14th Five-Year Plan" period, the total IPO financing through the SSE increased by 16% compared with the "13th Five-Year Plan" period. The total issuance of the exchange bond market reached 31 trillion yuan, a 42% increase from the "13th Five-Year Plan" period, including over 10 trillion yuan issued in industrial bonds and ABS products. The SSE vigorously promoted the REITs market, with 51 initial listings and 4 follow-on offerings, raising a total of 140.5 billion yuan, accounting for nearly 70% of the market share, and playing an active role in activating existing assets and expanding effective investment. The SSE took the lead in launching sci-tech innovation bonds, with a cumulative issuance of 1.51 trillion yuan, benefiting over 400 sci-tech enterprises. It also launched bonds supporting medium-, small- and micro-sized enterprises, with an issuance of over 19.7 billion yuan, supporting more than 1,800 small and micro enterprises. Leveraging the primary channel of M&As and restructurings. The SSE supported listed companies in M&As and restructurings to help them make use of existing assets and enhance core competitiveness. A number of innovative and exemplary hundred-billion-yuan deals were concluded, such as CSSC's merger of China Shipbuilding Industry Corporation, and Guotai Junan Securities' merger of Haitong Securities. Since the release of the "M&A Six Measures", 996 asset restructuring cases and 114 major asset restructuring deals were disclosed on the SSE, up 20% and 138% year-on-year respectively; the number of major asset restructuring projects on the STAR Market since 2024 has exceeded the total of the previous five years. Improving the ecosystem of "attracting long-term capital for making long-term investment". The SSE implemented measures to attract medium- and long-term funds into the market, and strongly advocated the philosophy of rational investment, value investment, and long-term investment. The index investing ecosystem, covering indices, index products, and ETF options, has increasingly improved, providing strong support for attracting medium- and long-term funds. Approximately 3,500 new indexes were compiled, and the multi-level SSE and CSI index system has kept improving. The market cap of ETFs increased from 900 billion yuan to 4 trillion yuan, representing nearly 3.5 times growth, making ETFs an important access channel for long-term funds. The SSE promoted the launch of the first sci-tech innovation bond ETFs, reshaping the market pattern of bond ETFs. The outstanding sci-tech innovation bond ETFs have reached nearly 160 billion yuan. The SSE also launched ETF option contracts based on the CSI 500 Index and the STAR 50 Index. With support from various sides, market resilience was further enhanced: during the "14th Five-Year Plan" period, the annualized volatility of the SSE Composite Index was 15.9%, a 2.8 percentage point decrease from the previous period, and market expectation and investor confidence improved significantly.

"Pivoting" - Deepening Reforms to Reshape Development Pattern

Reforms are strong impetus of development. Throughout the "14th Five-Year Plan" period, the pace of reform remained steady and consistent, promoting a subtle "pivoting" of market characteristics. Shift in listed companies' sense of responsibility. The SSE launched the "Corporate Value and Return Enhancement" special action to encourage dividend payout by SSE-listed companies. Over the past five years, representing the foundation of the economy, SSE-listed companies have achieved stable and resilient growth, with compound annual growth rates of 3.8% in operating revenue and 4.6% in net profit. The cumulative declared dividends reached 7.32 trillion yuan, a 51.2% increase from the previous period, accounting for over 70% of the total market dividends. The maximum amount of share repurchases and shareholding-increase reached over 366.2 billion yuan, a 150.4% increase from the previous period. Companies practiced the concept of "lucid waters and lush mountains are invaluable assets": in 2024, 57.7% of SSE-listed companies disclosed separate ESG-related reports, a 22 percentage point increase from 2020. 337 companies were covered by the MSCI ESG ratings, of which 104 were upgraded in the latest rating, and the number of companies with leading global ratings increased by 62% year-on-year. Transformation of trading structure. The market value of SSE A-shares held by professional institutions increased by 47% compared with the end of the previous period, among which the market value held by various medium- and long-term funds increased by 55%. The proportion of trading by professional institutions rose by 12 percentage points, and the proportion of trading by sci-tech innovation companies increased from 34% to 48%. Enhancement towards high-level institutional opening-up. The SSE proactively aligned itself with the national strategy of opening-up. The SSE included stock ETFs under the Shanghai-Hong Kong Stock Connect, and released ETF connectivity schemes with Hong Kong (China), Singapore, and Brazil markets. During the "14th Five-Year Plan" period, the cumulative trading volume of the Shanghai-Hong Kong Stock Connect reached 99 trillion yuan, a 275% increase from the "13th Five-Year Plan" period; 10 companies completed the issuance of Global Depositary Receipts (GDRs), raising a total of 3.35 billion US dollars. The scale of SSE cross-border index products exceeded 320 billion yuan, and its international influence continued to rise. The SSE pioneered cooperation with capital markets in the Middle East, held the Global Investors Conference for five consecutive years, and hosted over 1,000 meetings with over international institutions including overseas exchanges, foreign-funded institutions, think tanks, and universities, attracting more international investors into China's capital market.

"Synergy" - Strengthening Investor Protection to Build Sound Ecosystem

Investors are the foundation of the market. Pooling the "synergy" of all parties to implement "comprehensive investor protection" has been an important feature of the SSE's efforts to build a sound market ecosystem during the "14th Five-Year Plan" period. Strengthening supervision to safeguard market openness, fairness, and impartiality. Upholding "tough and effective supervision", the SSE launched new-generation corporate supervision profiling system, and strictly cracked down on violations detested by investors, such as fraudulent issuance, financial fraud, and fund misappropriation. The SSE imposed nearly 800 disciplinary sanctions, of which over 30% were severe punishment actions such as public condemnation; it took "zero-tolerance" action against over 170 cases of financial fraud or fund misappropriation/guarantee, and "severely punished" relevant parties in over 50 cases of illegal shareholding reduction. The SSE promoted a diversified regular delisting mechanism, with smooth implementation of two delisting system reforms. A total of 93 companies were delisted, including 70 forced delistings and 23 various voluntary delistings. The SSE strengthened monitoring of abnormal trading to effectively maintain stable market operation. Taking practical measures to enhance investors' sense of gain. The SSE encouraged listed companies to pay out dividends, in particular multiple dividend distributions per year. During the "14th Five-Year Plan" period, the average annual dividend yield of the SSE was close to 2.5%. The SSE improved the three-tier investor education and protection mechanism of "Exchange - Members - Investors", and optimized the investor suitability management system, formulating and revising mandatory clauses for risk disclosure statements for main board, STAR Market, and Shanghai-Hong Kong Stock Connect businesses to help investors better identify suitable investment products. The SSE pursued protection through "compensation", promoting advance compensation payment and the regular filing of representative lawsuits. The SSE extensively served investors' needs by carrying out brand activities such as "I am a Shareholder" and "Visiting the SSE", producing over 3,000 audio-visual investor education works, organized nearly 6,000 activities such as business departmental lectures, and providing offline cooperative courses covering over 100,000 students in 54 universities. The SSE built a communication bridge between investors and listed companies, promoted SSE-listed companies to strengthen their awareness of being public entities, achieved full coverage of annual report performance briefings, and organized over 1,600 "Visiting SSE-Listed Companies" activities. The SSE opened official accounts such as "SSE Release" (WeChat Channel) and "SSE Investor Services" (Douyin), using new media to respond to market concerns. Improving work style to enhance market satisfaction. The SSE continued to promote the special campaign of "Open Review, Open Supervision, and Open Services", handling over 150,000 business consultations and holding over 300 activities such as "Department Director Reception Days". The SSE launched lists of practical tasks serving the market for three consecutive years, cutting fees by approximately 4 billion yuan. The SSE promoted a concise and user-friendly rule system, reducing 131 rules over the five years (a nearly 30% decrease), and the number of supporting documents requested for listed companies' disclosure decreased by over 50% period-by-period. The SSE paid over 2,000 visits to listed companies to address urgent and difficult problems faced by market entities. The SSE accelerated digital transformation, built an online integrated service system for all products, made nearly 500 businesses available on the online one-stop service portal and mobile terminal to improve user-friendliness, and launched the "one-click" online voting service for listed companies' shareholder meetings, increasing the number of participating investors by 11 times. The SSE carried out special task to improve trading services, promptly responding to investor demands fed back by members, with a problem-solving rate of nearly 100%.

Moving forward, the SSE will closely focus on new requirements and tasks, forge ahead with determination and responsibility, unswervingly follow the path of financial development with Chinese characteristics, and provide strong support for Chinese-style modernization and the building of national financial power.