China’s Securities Regulator Commits to Stabilisation of Capital Markets

34

A senior official from the China Securities Regulatory Commission (CSRC) has committed to maintaining the stability of Chinese capital markets amidst the uncertainty created by renewed COVID lockdowns and the conflict in Ukraine.

“Since the start of the year the A-share market has seen sizeable volatility, mainly due to the impact of factors including the Ukraine crisis and the COVID pandemic,” said CSRC deputy-chair Wang Jianjun (王建军) in an interview with the People’s Daily.

“While the impact of various risk factors on the A-market objectively exist, these impacts are controllable, and there are firm foundations for the stable operation of the market.

“At present, the scope of market leverage funds is limited, risk is controllable, publicly offered funds are seeing net subscriptions and there have been no concentrated redemptions.

“We firmly believe that short-term volatility will not change the broader trend of the long-term improvement of China’s capital markets…capital market investment requires upholding value investment and long-term investment.”

Wang highlighted a slew of policy focal points in the near-term, including:

  1. Upholding the use of reform to drive development and stability. “We will firmly drive reforms of the share issuance registration system, strictly guard market entry, and support qualified Internet platform enterprises to list domestically or abroad.”
  2. Employing the endogenous stabilisation mechanisms of the market. “We will work with SASAC and other authorities to encourage listed companies to engage in buy-backs, large shareholders to increase holdings, and the expansion of dividends, supporting listed companies to resume work and production. We will push for the exchange bond market to support the rational financing needs of enterprises, and encourage publicly offered funds and securities companies in subscribing for asset management products with their own funds.”
  3. Actively introducing medium and long-term funds, and pushing for welfare, insurance, bank wealth management and other organizations to raise their equity investment ratios.
  4. Maintaining the stable operation of futures markets. Strengthen joint monitoring and regulation of securities, and diversifying and improving futures types.
  5. Strengthening cross-departmental communication and coordination.
  6. Improving baseline advance planning. Formulating work plans to prevent and resolve risk in key areas of the capital markets, and guarding the baseline against the onset of systemic financial risk.