A view of the Lujiazui area in Shanghai Photo: VCG

China's capital market has shown sustained vitality in recent days, with the Shanghai Composite Index holding above 3,700 points on Tuesday as northbound capital, or funds invested from the Hong Kong Special Administrative Region into the Chinese mainland via stock connect programs, continued to log steady net inflows.

A growing wave of investors has poured into the Chinese stock market. Backed by multiple favorable factors, A-shares have risen steadily, with market sentiment and investor confidence continuing to build. This momentum reflects more than just a cyclical rebound - it underscores China's steady economic improvement, structural upgrading, and ongoing shift in growth drivers. For both domestic and international investors, it is a collective vote of confidence in China's economic outlook.

China's capital market has evolved from being merely an "option" to a "safe haven" in global asset allocation. Amid turbulence in international financial markets, even minor shifts in tariff policies or interest-rate expectations in major economies such as the US can spark volatility. This has intensified risk aversion among global investors, prompting them to reassess both the safety and growth prospects of their investment choices.

China's economy operating within a reasonable range, combined with ample policy tools, provides strong systemic advantages. These translate into robust risk resilience and sustained growth momentum - qualities highly attractive to international investors.

Beyond attracting foreign capital, state-owned funds have also played a key role in supporting the healthy development of the A-share market.

Through strategic investments, state-owned capital actively supports the growth of emerging industries, bolstering the real economy, and instills confidence in both domestic and international investors. This has forged a path where financial capital guides industrial development, promoting high-quality growth in the real economy and strengthening China's position as a financial powerhouse.

As a key "barometer" of the macro economy, the stock market's recovery reflects China's resilience, potential, and promising outlook. Two main drivers underpin this trend: the steady improvement of economic fundamentals and the deepening openness of the capital market - the former providing a solid foundation, and the latter offering institutional assurance for overseas investors.

From a macroeconomic perspective, China's pursuit of high-quality growth reflects "steady progress with qualitative improvement," making it a rare investment destination that offers both growth and stability.

Solid fundamentals and an impressive "report card" have led S&P Global Ratings to maintain an "A+" rating and "stable" outlook for China's sovereign credit. Meanwhile, a group of globally competitive leading companies in sectors such as new energy, artificial intelligence, semiconductors, and biomedicine are rapidly emerging, forming a cluster of high-quality listed firms with reasonable valuations, stable earnings, and technological leadership, giving foreign investors a long-term anchor for committing further to China.

From the perspective of deepening opening-up, the institutional reform of China's capital market has given overseas investors more options and greater convenience in accessing A-shares. After years of deepening reform, the fundamental institutions of China's capital market have been continuously improved, its level of openness steadily enhanced, and restrictions on foreign access gradually lifted. Mechanisms such as the Shanghai-Hong Kong Stock Connect, Shenzhen-Hong Kong Stock Connect, and Bond Connect have provided international capital with convenient and efficient channels for allocation.

Taking a broad view, the industrial advantages built through China's industrialization, together with financial opening driven by market-oriented reforms, have created a supportive and self-reinforcing framework for the high-quality development of China's capital market.

Looking ahead, driven by the synergy of China's high-quality economic development, high-level financial opening-up, and the wealth effect of its markets, the A-share market will increasingly stand out for its dual role as both a global "safe haven" and a "growth engine."

The author is a macroeconomic analyst. bizopinion@globaltimes.com.cn