(Yicai) March 5 -- China’s government is linking up the importance of a sound capital market with macroeconomic regulation for the first time in its latest work report, according to a pension insurance expert.

Placing the stability of the capital market in the same section as monetary policy in the work report means that markets used to trade financial assets such as stocks and bonds will not be considered in isolation but as an important factor when formulating macroeconomic policies, Li Huiyong, general manager of research development at Changjiang Pension Insurance, said to Yicai.

The State Council released the work report today, calling for an "increase of inherent stability in the capital market" closely together with the topic of a “prudent monetary policy.”

Li added that the significance of balance in the capital market will be greatly increased, which signals more support from government bodies and policy. Last year's central financial work conference already presented specific arrangements to reduce the volatility of the market and investor confidence but this time, the work report directly confirmed market expectations, which will help boost investor confidence, Li analyzed.

In order to reach the goal, it is necessary to greatly improve listed companies’ quality and their investment value, as well as increase the supply of medium- and long-term funds in the stock market, said Xun Yugen, chief economist at Haitong Securities.

The work report explained that the country needs to moderately strengthen its proactive fiscal policy with enhanced quality and efficiency, while the prudent monetary policy should be flexible, moderate, precise as well as effective.

Editor: Emmi Laine