AsianFin -- China’s stock market, long derided as a casino for its roller-coaster moves and speculative frenzies, is showing early signs of maturity as retail investors grow more sophisticated and institutional participation rises.

For decades, mainland equities have been defined by boom-and-bust cycles, driven largely by individual traders chasing quick gains. But after years of painful lessons, a flood of digital financial education, and gradual regulatory nudges, retail investors are beginning to temper their expectations and adopt longer-term strategies.

“The real market is the best teacher. Real losses,” said Jin Xin, author of the Chinese investment guide Wealth Snowball: 10 Years, 10-Fold, the Essentials of Value Investing. A decade ago, he said, investors routinely sought annual returns of 30% to 50%, scoffing at single-digit gains. By contrast, U.S. benchmarks like the S&P 500 and Dow Jones Industrial Average delivered less than 15% on an annualized basis over the past decade.

That mindset is shifting. After the 2015 equity bubble burst, the property-sector meltdown in 2020, and scandals in high-yield products such as peer-to-peer lending, investors are more cautious. “Today, many aim for steady returns of 5% to 10% and are less inclined to chase single-stock stories,” Jin said. Still, he noted that Chinese companies lag Western peers in rewarding shareholders through dividends or buybacks.

The Shanghai Composite Index recently touched a 10-year high, while the CSI 300 Index of the largest mainland companies is at a three-year peak. Analysts attribute part of the rally to retail investors reallocating savings, supported by signs of easing U.S.-China trade tensions and expectations of a domestic recovery.

Retail traders still dominate, accounting for about 90% of daily turnover in China, compared with 20%–25% in the U.S., according to HSBC. Yet regulators’ push to expand institutional investors — pension funds, insurers, and asset managers — is helping reduce the wild swings that once defined the market.

“Volatility in A shares, which used to average 30%, is now closer to 20%,” said Aaron Costello, head of Asia at Cambridge Associates. “That’s still higher than the 15% typical in the U.S. or Europe, but the gap is narrowing.”

A 2024 survey by the Shanghai Advanced Institute of Finance and Charles Schwab found financial literacy among Chinese households improved markedly, with women scoring higher than men in financial planning for the first time. Wealth managers such as Noah Holdings say clients are increasingly evaluating funds based on long-term performance and manager track records rather than sheer return potential.

Technology has played a pivotal role. Financial apps, livestreaming platforms, and influencers have broadened access to market education for millions.

One of the most popular voices is Lindsay Zou, a former J.P. Morgan associate who began posting explainer videos on macroeconomics five years ago. She now boasts more than 2.5 million subscribers on YouTube, over 6 million on Bilibili, and 10 million on Douyin. Her popularity was evident this summer when fans mobbed her at an event hosted by China Asset Management Co., where she moderated a panel on index funds.

China AMC itself is riding the trend. Its “Red Rocket” mini-program on WeChat, launched last year to provide stock and index analysis, has attracted 10 million users.

Academic studies are beginning to quantify the impact. Research led by Bernard Yeung at the National University of Singapore found that exposure to digital financial content boosts stock market participation, portfolio diversification, and risk-adjusted returns — even among older or less affluent investors. Visual content such as videos proved especially influential.

“The emergence of professional platforms has filtered out market noise,” said Wang Wei, a researcher at Tianjin University of Commerce. Still, he cautioned, pockets of speculation remain, particularly in sectors like electric vehicles and semiconductors.

China’s state interventions remain a double-edged sword. Authorities have repeatedly stepped in to stabilize markets during crises, a strategy that can calm panic but risks distorting valuations and undermining investor confidence. Skeptics argue such moves hinder the development of a market driven by fundamentals.

Even so, equities have staged a strong run ahead of key political milestones. Wang noted parallels with October last year, when stocks surged after a rare government meeting signaled fresh stimulus and before the National Day holiday marking the 75th anniversary of the People’s Republic. Investors are watching upcoming events closely, including the Shanghai Cooperation Organization summit in Tianjin at the end of August and a military parade in Beijing on Sept. 3.

China’s stock market is barely three decades old — a fraction of the history of the New York Stock Exchange, founded in 1792, or the London Stock Exchange, established in 1801. The immaturity has often shown: sudden rallies, deep slumps, and trading patterns dominated by rumor.

But the tide is turning. Investors scarred by past losses, empowered by digital platforms, and nudged by regulators are building habits more akin to those in developed markets. Volatility remains higher than in the West, and retail investors still drive the bulk of activity. Yet the market is slowly shaking off its casino reputation.

“The shift won’t happen overnight,” Jin said. “But with each cycle, investors learn. And that’s how a market grows up.”