Yi Huiman, the newly appointed chairman of the China Securities Regulatory Commission (CSRC), held his first press conference on Wednesday.
In his remarks he underlined “four essentials”.
“We must respect the market, and let the capital market have a full play in allocating resources, pricing assets and mitigating risks. We must respect the law, and considerably increase the costs of illegal behavior. We must respect professionalism and deepen capital market reforms. We must pay close attention to risks, and step up the efforts to diffuse major financial risks,” Yi said.
Overall, Yi maintained a relatively low profile.
Instead of talking up the equity market and giving too-high hopes to individual investors, he just pledged to enhance coordination, and remove bottlenecks for social security funds, insurance firms and other institutional investors to invest in stocks, in order to lure more medium-to-long-term capital into the market.
Still, Yi’s first public speech in his new position has been well received. That might have a lot to do with the “beginner’s luck.”
Since Yi was named the head of the CSRC on Jan. 26, the Shanghai benchmark index has moved up from below 2,600 points to about 3,000 points, marking a round of strong recovery after months of weakness.
Yi didn’t show any excitement about the recent market strength. Nor did he warn against excessive optimism. This sort of neutral stance might actually work the best for investors, and goes in line with his pledge to respect the market and let market forces do the job.
In the long run, Yi will be judged for his ability to carry out two missions. First will be the launch of a new science and technology innovation board.
Yi’s second mission would be to revitalize, or at least stabilize, the market in a sustainable way, as Chinese President Xi Jinping has stressed that capital market is a critical part of a nation’s core competitiveness.
This article appeared in the Hong Kong Economic Journal on Feb 28
Translation by Julie Zhu
[Chinese version 中文版]
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