New China securities chief offers carrot and stick to markets

Beijing, China | AFP | China will develop and modernise its financial markets while policing them with an iron fist, the country’s new securities regulator said on Wednesday, in his keenly awaited first press conference in the role.

Chinese stocks were among the world’s worst performing last year due to a government crackdown on excess debt leveraging and concerns over the US-China trade conflict.

But after pledging to bring the financial system under control last year, authorities have made a sharp u-turn, implementing a slew of policies to make access to capital easier.

Yi Huiman, appointed last month as head of the China Securities Regulatory Commission, said China was intent on transforming the country’s historically unruly bourses into world class capital markets.

China will "give full play to the capital market’s important role in resource allocation, asset pricing and risk mitigation," Yi told reporters in Beijing.

It would also "strengthen supervision throughout the process and realise market-based survival of the fittest," while respecting the law and adhering to the rules of the market, he said.

Yi’s briefing had been hotly anticipated for clues into how he would govern China’s volatile markets.

New measures to improve access to capital, combined with a number of steps to widen foreign access to China’s markets and ease many rules, have helped spur a major Chinese stock rally since the start of the year.

One of China’s major new market initiatives is the planned establishment of a Nasdaq-style tech board in Shanghai, designed to encourage Chinese start-ups to list at home after losing the likes of tech champions Alibaba and Baidu to Wall Street.

Existing rules on initial public offerings ban companies from listing unless they have a track record of profits, put caps on their pricing and how much they are allowed to rise or fall, along with other restrictions.

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Those and other constraints will be lifted or eased under rules released previously for the new technology board.

Yi pledged China would continue on a course to develop "open" and "transparent" financial markets.

The new tech board was announced by President Xi Jinping in November as China battles the United States for global supremacy in the tech sector.

Yi did not give a timetable for its launch.
 

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