On July 30, the Political Bureau of the CPC Central Committee held a meeting to analyze the current economic situation and deploy economic work for the second half of the year. According to the National Business Daily, statements such as "advancing capacity governance in key industries," "standardizing local investment promotion practices," "enhancing the appeal and inclusiveness of the domestic capital market," and "entrepreneurs should stand at the forefront and win market competition with high-quality products and services" appeared for the first time in a meeting of the Political Bureau of the CPC Central Committee.

These four statements each have their own focus and profound implications, and they will undoubtedly bring significant impacts and transformations to their respective fields and industries. Among them, for the capital market, how should we understand the requirement to "enhance the appeal of the domestic capital market"? The author believes that efforts can be made from the following three perspectives.

First, enhancing the appeal of the capital market requires improving its inclusiveness.

The main constraint on capital market development is not capital but the number of high-quality listed companies. The more high-quality companies there are, the stronger the appeal of the capital market. The criteria for judging whether a listed company is high-quality are not singular: mature high-quality companies have stable profits and cash flows, growing outstanding companies may show losses on paper but have rapid revenue growth, and some high-quality companies have high R&D investments and significant paper losses, with revenue scales and growth rates that are not outstanding, but they possess breakthrough key technologies and represent the direction of new productive forces. Improving inclusiveness means facilitating the entry of companies at different development stages into the capital market, providing investors with more choices, and ultimately relying on market valuations to screen out high-quality companies.

The author believes that, regardless of their development stage, high-quality listed companies are scarce resources, and major global exchanges are fiercely competing for them. The capital market needs to attract these high-quality companies at an earlier stage, which also requires greater market inclusiveness. Only by embracing all rivers can the capital market become a "vast ocean."

Second, the key to enhancing the appeal of the capital market lies in improving investor returns.

Both dividends and stock price increases can provide tangible returns to investors. In terms of dividends, the A-share market is already highly competitive, with total cash dividends reaching 2.39 trillion yuan in 2024, corresponding to a dividend yield of 2.4% of the total A-share market capitalization at the end of 2024, far exceeding bank deposit interest rates. For some high-dividend stocks, the dividend yield is even more impressive. In terms of stock prices, many bank stocks and chip stocks that have overcome "bottleneck" technologies have repeatedly hit new highs, giving investors a strong sense of gain. A series of reform measures aimed at emphasizing investment returns in the capital market have already achieved significant results, and future reforms will not stop here.

The author believes that imposing stricter constraints on listed companies' returns can also help address the issue of "involution-style" competition to some extent—only by maintaining a certain level of profitability and ensuring sufficient cash flow can companies have the conditions to reward shareholders. Selling below cost is not a viable strategy.

Third, enhancing the appeal of the capital market requires coordinated efforts from multiple parties.

The capital market is a complex system where policies, the performance of large enterprises, the movements of investment institutions, information dissemination, and market sentiment can all impact the market. The July 30 meeting of the Political Bureau of the CPC Central Committee once again emphasized "strengthening the consistency of macroeconomic policy orientations," requiring "governing disorderly competition among enterprises in accordance with laws and regulations" and "standardizing local investment promotion practices." A series of recently introduced or announced policies have significantly improved expectations and boosted market confidence, with commodity futures prices for polysilicon, coal, and glass rising sharply and the stock prices of related listed companies also rebounding noticeably.

At the industry and institutional levels, the gradual implementation of the "Document No. 136" on new energy power, the standardization of "60-day payment terms" for automobile companies, the comprehensive fee reductions in the public fund industry, the burgeoning issuance of floating-rate products, and the implementation of long-term performance evaluations for insurance companies have all created conditions for the sustained stabilization and improvement of the capital market.

In terms of market order, public security, cyberspace administration, and securities regulatory authorities have worked closely together to promptly address various "rumors" and "stock market manipulators," making the capital market clearer and more transparent. Currently, market participants have formed a synergy, and the appeal of the capital market is expected to continue to improve.

In summary, enhancing the appeal of the capital market is a "virtuous cycle" that requires multi-directional efforts, multilateral coordination, and benefits for multiple parties. This is also the "greatest confidence" in advancing the high-quality development of the capital market.