stock market Photo:VCG

China's securities watchdog on Friday vowed stepped-up efforts to crack down on illegal activities that disrupt the market trading order and to earnestly protect the fundamental interests of investors, as China's stock market surges amid global investors' revaluation of Chinese shares at the start of 2025.

"The capital market is an essential support for building the country into a financial powerhouse, serving as an important venue for corporate financing and a significant investment channel for millions of ordinary investors. Protecting the legitimate rights and interests of investors is a top priority for the China Securities Regulatory Commission (CSRC)," Li Ming, vice chairman of the CSRC, said at a press conference in Beijing on Friday.

Illegal activities such as fraudulent issuance, financial fraud and market manipulation seriously disrupt market order, erode the foundation of market credibility, and can even incur financial risks, severely harming the interests of the public and undermining investor confidence, Li said. With a zero-tolerance attitude, the authorities have handled a batch of typical illegal activities and deeply purified the market environment, according to Li.

Chinese procurators prosecuted 1,011 people for securities-related crimes from 2022 to 2024, an annual rise of 16 percent on average, Ge Xiaoyan, deputy procurator-general of the Supreme People's Procuratorate (SPP), said at the same press conference on Friday.

A number of cases were publicized by the SPP during the press conference held in collaboration with the CSRC. These cases address critical issues such as financial fraud, fraudulent issuance, improper disclosures, insider trading, and market manipulation within the securities sector, Ge said.

The official emphasized the role of prosecutors in legal oversight to promote the high-quality development of the capital market. The prosecutions have ensured accountability among all parties involved, including controlling shareholders, chairpersons and senior executives of listed companies, financial industry personnel, intermediaries, and individuals unlawfully acquiring insider information.

This came as Chinese authorities strengthened regulations in the capital market to maintain its stable and healthy development and boost investor confidence. Last month, six Chinese government agencies, including the CSRC, unveiled a plan to encourage medium- and long-term funds to enter the capital market.

Amid policy support and DeepSeek's launch of a game-changing large language model, global investors are revaluating Chinese shares. Eva Lee, head of Greater China Equities at UBS Global Wealth Management Chief Investment Office, said in a new note that "we maintain a positive outlook on the Chinese internet sector given generally improving fundamentals, attractive valuations, encouraging shareholder returns, and growing longer-term AI tailwinds."

Chinese stocks closed higher on Friday, with the benchmark Shanghai Composite Index up 0.85 percent to 3,379.11 points, while the Shenzhen Component Index closed 1.82 percent higher at 10,991.37 points.

The combined turnover of the stock market was 2.19 trillion yuan ($305.46 billion), up from 1.79 trillion yuan on the previous trading day.

Companies related to semiconductors and computing power led the gains, while precious metal and banking sectors suffered major losses.

"Amid stepped-up policy support, investors are more bullish on China's stock markets. There are many opportunities to be explored in A-share and H-share markets, which are expected to attract more inflow of overseas capital in 2025," Yang Delong, chief economist at Shenzhen-based First Seafront Fund, told the Global Times on Friday.

In the future, "AI + healthcare" and "AI + other industries" are likely to yield significant applications. With the largest population and consumer market in the world, China has considerable advantages in AI application, which will also bring more investment opportunities to the capital market, Yang said.

A meeting chaired by Wu Qing, chairman of the CSRC, on Monday, stressed that the securities regulator will step up support for the equity and bond financing of private enterprises. With a focus on serving the development of new quality productive forces, the CSRC will earnestly implement a series of policies that have already been rolled out and improve the building of a multi-layered capital market, nurture patient capital and help more excellent private enterprises grow, according to the meeting.