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China’s financial reform and opening-up during the 15th Five-Year Plan (2026-2030) will continue to focus on deepening institutional openness, harmonizing rules and standards with international norms, steadily advancing the international use of the yuan, and enhancing risk prevention in an open environment, a recent report from Ernst & Young reveals.
The goal is to develop a modern financial system that is more robust, efficient, and internationally recognized. During this period, the country aims to actively support qualified Chinese-funded financial institutions in expanding overseas, improving their global service networks, while further optimizing the business environment and attracting distinctive foreign financial institutions, the report states.
Reflecting on the key policies, events, and trends in China’s financial market reforms and opening-up efforts last year, the report notes that 2025, the final year of the 14th Five-Year Plan, marked a new phase of systematic deepening and high-level progress. Under the guidance of the Central Financial Work Conference’s spirit, the financial sector concentrated on areas such as technology finance, green finance, inclusive finance, pension finance, and digital finance. It also promoted institutional opening-up, shifted focus from scale expansion to quality improvement, and moved steadily toward becoming a financial powerhouse.
Last year, China’s financial opening-up transitioned from primarily market access measures to institutional reforms aimed at aligning rules, regulations, management, and standards. Notable regions like Shanghai, the Guangdong-Hong Kong-Macao Greater Bay Area, the Hainan Free Trade Port, and the Yangtze River Delta made significant strides in opening-up and innovation, forming a comprehensive pattern of regional collaboration and breakthroughs.
Market Development and Yuan Internationalization Accelerate
Regarding market growth, the dual-way opening of the capital market deepened further. Enhancements to the Shanghai-Hong Kong and Shenzhen-Hong Kong Stock Connect programs notably increased northbound and southbound fund flows. Bond Connect trading volumes surged, and overseas institutions steadily increased holdings of yuan-denominated bonds. The international use of the yuan also gained momentum. By October 2025, the Cross-border Interbank Payment System (CIPS) operated with participation from 189 countries and regions globally, and the digital yuan saw rapid progress, fostering a dual engine for yuan internationalization.
Efforts to attract foreign investment and support domestic institutions’ global expansion advanced simultaneously. Foreign banks, securities firms, insurers, and public funds accelerated their growth within China, focusing on specialized sectors such as wealth management, green finance, and technological insurance. Chinese financial institutions expanded internationally by establishing branches, participating in global governance, and improving service capabilities in Belt and Road Initiative countries and emerging markets.
At the operational level, systems like the Qualified Foreign Institutional Investor (QFII) and Qualified Foreign Limited Partner (QFLP) programs continued to improve, with quota increases for the Qualified Domestic Institutional Investor (QDII) scheme. Cross-border initiatives such as Wealth Management Connect, ETF interconnection, and mutual recognition of funds were further refined, strengthening integration between domestic and foreign markets.
The report highlights an even closer integration of finance and technology, noting the development of a financial support system that covers all stages of technological innovation. This framework aims to provide strong backing for fostering new productive forces and supporting the real economy.
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