China’s securities regulator’s chief says stabilizing the market is top priority

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SHANGHAI: The chief of China’s securities regulator said they will make stable capital market operations a top priority amid mounting concerns about the economic outlook and stock swings.

The world’s second largest economy slowed sharply in the second quarter due to widespread COVID-19 lockdowns and a slumping real estate sector.

The benchmark CSI 300 Index fell for four consecutive weeks last month, as foreign investors sold 21 billion yuan ($3.1 billion) worth of Chinese stocks through the stock connect scheme, breaking off three consecutive months of inflows.

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“It is a rule that the stock market has ups and downs, and the government should not intervene in normal fluctuations,” Yi Huiman, chairman of the China Securities Regulatory Commission (CSRC) wrote in Qiushi, an official journal of the Chinese Communist Party. published Monday.

“However, non-intervention is not laissez-faire – we must always stick to the bottom-line mindset and resolutely prevent ‘market failure’ from causing abnormal swings.”

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Yi said capital markets are a “barometer” of a country’s economy, a reflection of expectations and confidence, making it important to maintain their stable and healthy development.

He added that the regulator would strengthen coordination with macroeconomic management departments and industry authorities to maintain consistent policy expectations and resolve real estate developer risks.

He also said that China has met the conditions to fully implement a registration-based IPO system and that the regulator would ensure a smooth implementation of this reform.

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The CSRC will accelerate the implementation of offshore listing rules and support the offshore listing of various types of companies, Yi added.

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