Pacific abalone (Haliotis discus hannai Ino) aquaculture is a thriving industry in China. This study describes a novel submerged cage culture system for abalone rearing in Fujian, South China. The cage consisted of five vertical slots that were oriented perpendicular to the flow of water. The slots were separated by six vertically connected plastic plates for abalone attachment and shelter at the bottom of the cage. Experiment 1 was designed to determine the appropriate stocking density at the start of the abalone sea-based production cycle. Eight-month-old hatchery reared and size-graded juveniles were transferred to the sea-based culture system. For different stocking densities, shell length of juveniles obtained in this novel culture system on 2, 3.5 and 5 months, respectively, was compared with shell lengths obtained in a traditionally multi-tier basket culture system. In Experiment 2, daily growth rates (DGRs) in shell length and biomass in terms of wet weight of 2-year-old abalones reared in cage and tiered basket culture systems were compared over a 6-month period. Results of Experiment 1 showed that growth of abalone in the cage culture system is density-dependent; the mean final shell length of juveniles obtained was 6.7–15.9% higher than in tiered baskets system even at the same initial stocking density. In Experiment 2, DGRs in shell length of 53.83–78.38 μm day−1 obtained in cage system were significantly higher than that in tiered baskets (P < 0.01). And in terms of wet weight biomass, it was 1.48–3.01 times higher in the cage system compared with the traditional system. Abalone survival was more than 87.5% in both culture systems in both experiments. Advantages of the newly established cage culture system included better growth performance of the animals reared and potential improvement of rearing conditions, such as improved water flow velocity and dissolved oxygen.