Wu Qing, who ran the Shanghai Stock Exchange between 2016 and 2017, has been appointed Chairman and Party Secretary of the China Securities Regulatory Commission (CSRC), succeeding Yi Huiman, who had been in the position since 2019. Before this promotion, Wu – who holds a PhD in economics – was Deputy Party Secretary of Shanghai. He was entrusted to run the Shanghai Stock Exchange following a 2015 meltdown in China’s capital markets. Before his stint in Shanghai and the city’s bourse, he had worked at the CSRC for years, overseeing fund and institutional supervision as well as risk disposal for securities companies.
The appointment came after the regulator announced a set of policies to prevent a stock market rout and lift investor sentiment, including fresh curbs on short selling and an intervention by state investment arm Central Huijin Investment to increase stock holdings in the market. Beijing has laid out an ambitious plan to turn the country into a financial superpower to better support the real economy, and President Xi Jinping has said preventing and resolving financial risks must be an “eternal theme” for the government. The top leadership also highlighted concerns over the fragility of its financial system, particularly as China faces an increasingly turbulent geopolitical environment, grapples with a property crisis, and attempts to buoy weakened confidence across the economy, all of which have hampered a solid and sustained recovery.
The appointment is a mood-boosting measure, said Fu Weigang, Executive Director at the Shanghai Institute of Finance and Law. Fu added that, historically, Beijing would reshuffle personnel whenever there is a big stock market rout. As Chairman of the securities regulator, Wu faces the immediate task of restoring confidence among the nation’s 220 million individual investors, the largest group in the world, whose wealth is facing further erosion after the prolonged decline in stocks.
China’s stock market, the world’s second-largest globally with a combined market value of USD8 trillion, has seen a wipeout of about USD3 trillion in capitalization over the past three years, as Covid lockdowns crippled production and dented consumer spending, while the post-pandemic recovery faltered. Wu’s appointment comes at a critical time for China’s yuan stocks, which have rebounded from a five-year low after the government ramped up efforts to bail out the beleaguered market last week ahead of the suspension during the week-long Chinese New Year holiday. In the new package of rescue measures, the nation’s USD1.24 trillion wealth fund boosted purchases of exchange-traded funds to stabilize sentiment, and the CSRC imposed new restrictions on short-selling while vowing to ramp up a crackdown on trading misconduct, ranging from manipulations to insider trading. The new rescue package came after Premier Li Qiang last month urged more meaningful measures to shore up stocks, the South China Morning Post reports.