China has set up a cross-agency team, led by the country's securities watchdog, to coordinate crackdown efforts against illegal activities in capital markets.

The China Securities Regulatory Commission (CSRC) said on Thursday it recently held the first meeting with other team members, including the country's propaganda department, supreme court, supreme procuratorate, police, ministry of justice and ministry of finance.

Cracking down on securities misbehavior is vitally important to building an open, transparent and vibrant capital market that serves high-quality growth of the economy, CSRC said in a statement on its website.

China is seeking to channel more household savings into equities and bonds to fund innovation and economic expansion amid lingering Sino-U.S. tensions and signs of slowing domestic growth.

CSRC said the newly established team will promote better coordination between the central and local governments, and different Chinese regions, to better regulate capital markets.

It will also step up punishment of misconduct including book-cooking, market manipulation and insider trading with "zero tolerance," while improving China's system to protect the interest of individual investors.