(Yicai) May 7 -- China unveiled a stricter performance evaluation mechanism and introduced a floating fee collection system tied to investment returns to promote the high-quality development of the public mutual fund industry.

The country will integrate metrics critical to investor interests, such as whether funds outperform their benchmark, into the evaluation process of public mutual fund companies and managers, calling for a shift to a ‘return-focused’ from a ‘scale-first’ approach, Wu Qing, chairman of the China Securities Regulatory Commission, said at a press conference today.

China will also stabilize public mutual fund investment behaviors by requiring each fund to set clear performance benchmarks to prevent deviation from their original objectives, with the returns on investments of over three years expected to account for at least 80 percent of performance evaluations, Wu noted.

The above measures are part of a market-stabilizing package that the CSRC, the National Administration of Financial Regulation, and the People’s Bank of China unveiled today in response to challenges posed by US tariffs. It includes cuts to the reserve requirement ratio and interest rates and enhancements to the capital market oversight system.

During the conference, Wu referenced Warren Buffett, the chairman of Berkshire Hathaway. While Buffett is set to retire this year, his principles of long-term value investments, rational decision-making, and prioritizing investor returns will survive, Wu noted.

“After Buffett’s retirement, this era still calls for new great investors,” Wu added. “With our market’s pool of exceptional companies and entrepreneurs, I am confident that outstanding investors and institutions will emerge.”

In addition to public mutual fund reforms, the CSRC will also roll out policies to deepen reforms for the Start Market and ChiNext technology boards, improving the adaptability of their market structure, review mechanisms, and investor protection.

A revised regulation on major asset restructuring for listed companies will also be released to bolster the capital market’s role as a primary channel for mergers and acquisitions, Wu pointed out.

Editor: Futura Costaglione