Top regulators signal reforms bolstering confidence in Chinese stock market

On Friday morning, the heads of the central bank and the banking, insurance and securities regulatory bodies collectively voiced their optimism in the future of the stock market in their respective interviews with the media. ThePaper.cn comments:

The three officials responded to investors' concerns, and sought to dispel the market's anxiety over the future of the Chinese economy.

Liu Shiyu, chairman of the China Securities Regulatory Commission, said that the commission will encourage various types of funds managed by local governments, qualified private equity investment funds, and brokerage asset management products to jointly organize new funds to help listed companies with good development prospects but experiencing temporary difficulties to solve their stock pledge plights.

Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission, said that it is necessary to give full play to the long-term stable investment advantage of insurance funds, increase the financial nature of insurance funds and strategically invest in high-quality listed companies.

Yi Gang, president of the People's Bank of China, pointed out that the stock market has reached a comparatively low point in history, which is in sharp contrast to China's economic fundamentals.

Their comments signaled that the government will alleviate the problem of corporate financing difficulties, help private enterprises, especially privately-controlled listed companies, solve the problem of debt issuance, and promote the implementation of a private enterprise bond financing support plan.

In the future, the Chinese economy will no longer simply pursue growth, but will focus on improving the quality of economic growth through economic transformation and upgrading. Moreover, a series of reform measures such as reducing taxes and fees, and supporting small and medium-sized enterprises are expected to improve the operating environment for Chinese enterprises.

That said, the authorities should further consolidate investors' confidence through deepening reforms in some difficult areas so as to create a better rule-of-law business environment and more predictable anticipations.