Editor's note: Chen Jiahe is the chief investment officer at Novem Arcae Technologies. The article reflects the author's opinions and not necessarily the views of CGTN.

The State Council, China's Cabinet, published a key guideline for the high-quality development of China's capital market on Friday. With the timing and the content of this guideline, together with the current status of the country's equity markets, I believe this is a perfect time to find good investment targets in China. In fact, as an investor myself, I am putting 100 percent of my investment in the equities in the A-shares, B-shares and Hong Kong stock markets.

The first important factor is the timing of this guideline's release. This is the third time that the State Council published such guidelines for the capital market. The last two guidelines were published in 2004 and 2014.

Those who know China's capital market well will soon recall that there were two bull markets that followed those previous two guidelines. 

The Shanghai Composite Index, one of China's oldest benchmark stock indices, rose from 998 points to 6,124 points between 2005 and 2007, right after the first guideline was published, and again climbed from around 2,000 points to 5,178 points between 2014 and 2015 after the second guideline was published.

Now comes the third guideline, which has been published at a time when China's equity markets have been performing weakly in the past few years. Remember, investment history tells us that every bull market must be preceded by a bear market. Therefore, the publishing of the third guideline to support the country's capital market can be a wonderful sign to find appropriate investment targets in China.

Let us look into the details of this guideline about the aspects it discusses. Overall speaking, this guideline states that China's capital market must pursue high-quality growth and perform as an important cornerstone for the growth of China's economy. Delving into the details, this growth shall be worked out from various aspects.

The first aspect is the quality of listed companies, which contains the improvement of the initial public offering (IPO) system, the supervision of listed companies, as well as the efficiency of the de-listing process. 

With these three components employed in the future, China's capital market can have high-quality listed companies and get rid of the companies that fail to meet the criteria, especially those companies that have committed fraud in their businesses and financial statements. Meanwhile, the punishment for misbehavior of listed companies will also be strengthened. This has already been expressed in the recent amendments to China's securities laws and regulations.