Wu Qing, chairman of the China Securities Regulatory Commission, answers a question at a press conference during the second session of the 14th National People's Congress (NPC) in Beijing, March 6, 2024. (Photo by WANG Zhao / AFP) (Photo by WANG ZHAO/AFP via Getty Images)
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BEIJING – China's top securities regulator vowed to take “strict” action against market manipulators while saying protecting retail investors was a “core task.”
Ensuring fairness, especially in a market dominated by smaller investors, is the regulator's core task, Wu Qing, chairman of the China Securities Regulatory Commission, said on Wednesday at a joint news conference with the country's other top economic and financial planners.
Wu outlined measures he deemed necessary to improve the quality of listed companies and increase return on capital. These include: encouraging listed companies to improve the stability, timeliness and predictability of dividend distributions, stricter delisting rules and expanding inspections of listed companies.
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He said that openness, fairness and justice should be the most important principles in the capital market.
“China's market is the second largest in the world, but it is not that strong,” Wu said, adding that recent market volatility has exposed deep problems.
He said investors needed to be better protected so they could have confidence. It would also attract longer-term investors, he added.
At the same press conference, Pan Gongsheng, governor of the People's Bank of China, also promised support for overseas listings of high-quality Chinese companies.
Difficult markets
Due to recent extreme market volatility, Beijing has stepped up measures to support its battered stock markets in recent weeks.
These include tightening regulatory restrictions on the rapidly booming quant trading industry and curbing short selling, changing the top securities regulator and stock purchases by a “national team”.
The appointment of market veteran Wu as chairman of the China Securities Regulatory Commission in early February preceded restrictions on quant traders.
A securities trading hall in Fuyang, China, in December 2023.
Cost photo | Photo only | Getty Images
Wu is known as the “Broker Butcher” because of his crackdown on traders in his previous roles as acting vice mayor of China's largest financial center Shanghai and chairman of the Shanghai Stock Exchange.
The Hang Seng Index, a benchmark of Hong Kong listings that includes many offshore stocks from China, has posted four straight annual losses, while the CSI300 index of the largest mainland-listed blue chips has posted three straight years of losses.
With the mainland real estate market in the doldrums and stock markets in free fall, desperate mainland investors had looked elsewhere for better returns despite strict capital controls.
At last year's parliamentary session, Beijing announced an overhaul of financial and technology regulation by setting up party-led commissions to oversee the two sectors, while Xi Jinping won an unprecedented third term as president.