China replaces head of securities regulator after stock market meltdown

Feb 7, 2024

Hong Kong CNN  — 

China has replaced the head of its securities regulator, as public anger over the meltdown in the stock market grows.

Wu Qing, a banking veteran and most recently the deputy party secretary of Shanghai, was named as chairman and party secretary of the China Securities Regulatory Commission (CSRC), replacing Yi Huiman, who assumed the role in January 2019, according to a state news agency Xinhua report on Wednesday.

Wu, 59, was also the chairman of the Shanghai Stock Exchange, the largest stock exchange in mainland China, between 2016 and 2018. He had previously worked with financial regulators for two decades, including at the CSRC.

Chinese stock markets have stabilised this week but they had a dire 2023 and have been the world’s worst performer this year. By Monday, about $6.1 trillion in market value had been wiped from the Chinese and Hong Kong stock markets since their recent peaks in February 2021.

Tens of thousands of Chinese people have flocked to a social media account of the US Embassy in Beijing to vent their anger and frustration about the stock market, after other outlets of protest had been closed off.

Officials are scrambling to draw a line under the market rout.

On Tuesday, Central Huijin Investment, the equity arm of China’s sovereign wealth fund, said it would step up buying shares. Shortly after the announcement, the CSRC issued a statement saying it “firmly supports” Central Huijin Investment in its plan.

On Wednesday, mainland Chinese stock markets logged a second straight day of gains. The Shanghai Composite Index ended up 1.4%, while the Shenzhen Component Index jumped 2.9%.

The redoubled attempts to rescue Chinese stocks appear to have bought Beijing some more time, but they don’t address the underlying challenges the economy faces — weak demand, deflationary pressures, a crashed real estate sector, and rising trade tensions with the United States.

A previous brief period of market calm following soothing words from Beijing was brought to an abrupt end late last month when a Hong Kong court ordered Evergrande, the poster child of China’s property crisis, to liquidate. That sent investors running for the exits again.

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