China's State Council, or the cabinet, has unveiled the guiding principles of the regulations intended for the capital market in the coming years.

The first guideline envisions a multi-tier market by 2020 with a proper structure, functions and regulations, and high levels of efficiency and inclusiveness.

The guideline lays down nine targets that Chinese authorities will strive to attain over the coming years, including dealing with government-market relations, innovation and mixed ownership in order to boost the healthy development of the capital market.

The approval-based stock issuance system will be replaced by a registration-based one and the de-listing regime will be improved.
 
Furthermore, the guideline provides for diverse bonds to meet different investment needs and steps up the level of supervision for the bond market.

Monitoring of systemic risks will be paramount and authorities will toughen the punishments for breaches of laws and regulations.
The benefits of small and medium investors will be protected in accordance with laws and regulations to ensure the safety of the capital market.

Meanwhile, approval of private equity issuance will be lifted and capital raised through private equity will be encouraged in order to fund small enterprises.

The futures market will be diversified through resources commodity futures, marking the first time for the country to vigorously support private equity through regulations enacted by the State Council.

According to the new guideline, a credit system will be established and perfected in the future, especially for small and micro enterprises, in the hope of creating a more transparent capital market.