Advertisement
China’s stock market: Beijing issues unprecedented guidelines calling for transparency, risk-management
- A document published by the nation’s cabinet promises the ‘high-quality’ development of China’s capital market by strengthening supervision
- It comes a few months after President Xi stressed the importance of preventing systemic financial risk and called on financial regulators to clarify their responsibilities
Reading Time:3 minutes
Why you can trust SCMP
21
Zhang Shidongin Shanghai
China has issued an unprecedented set of policy guidelines to push for transparency, security, risk-management and vibrancy in the country’s US$9 trillion stock market, sketching out a view of what the world’s second-largest capital market could look like by the middle of the century as Beijing solidifies its goal of becoming a financial superpower.
Advertisement
A document published by the nation’s cabinet on Friday promises to promote the “high-quality” development of China’s capital market by strengthening supervision and guarding against risks.
It comes just two months after former Shanghai vice-mayor Wu Qing, dubbed the “broker butcher” for his tough approach to tackling market malpractice, was brought in to head the country’s securities regulator.
The document released by the State Council after the markets closed on Friday evening sets out nine guidelines that formulate a framework to develop the market, demanding a better mechanism for protecting investors’ interests and an improvement in the quality of listed companies over the next five years.
By 2035, the market should have achieved “a reasonable structure of investing and fundraising” in which listed companies have demonstrated a significant improvement in quality, it said. There must also be demonstrable progress in cultivating first-class investment banks and financial institutions.
“This will boost investors’ sentiment to some extent,” said Dai Ming, a fund manager at Huichen Asset Management in Shanghai. “But it’s guidelines, and what we’ll need to see going forward is how the securities regulator will implement these changes.
Advertisement