China's stock market is too
small and has too little foreign participation to be blamed for triggering last
week's rout in global share prices, the country's securities regulator said on
Monday.
Shang Fulin, chairman of the China
Securities Regulatory Commission.
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"China's stock market right now is
relatively small and not very globalize. So it's not possible for it to have
such an impact," Shang Fulin, chairman of the China Securities Regulatory
Commission (CSRC), told reporters.
A plunge of 8.84 percent last Tuesday in the benchmark Shanghai Composite
Index, the biggest drop in a decade, served as a wake-up call to global
investors that they had been underpricing risk assets around the world.
Weak U.S. durable goods orders and worries about defaults on poor-quality
mortgages later drove U.S. share prices sharply lower. Global markets have been
struggling to stabilize ever since.
But Shang said each market behaved according to its own characteristics.
"Markets in different countries are mainly influenced by their own domestic
conditions and will influence each other according to the globalization of their
market," he said on the sidelines of the annual session of the National People's
Congress, China's parliament.
Shang said the question of whether the CSRC would assume oversight of China's
corporate bond market was under active consideration.
The National Development and Reform Commission (NDRC), the top planning
agency, is currently responsible for approving new issues.
Critics complain that the NDRC's conservative issuance criteria have stunted
volumes at a time when developing the capital markets should be a priority for a
country where banks provide some 80 percent of companies' external
funding.
