Chinese shares rose yesterday as investors appeared to welcome Beijing’s choice of an industry veteran to head its securities watchdog, in its latest effort to boost confidence in ailing markets.
Wu Qing, a former chair of the Shanghai Stock Exchange with a reputation for being tough on market misbehavior, was named chairman and Communist Party chief of the China Securities Regulatory Commission late Wednesday.
He replaced Yi Huiman, who presided over months of turmoil as share markets slumped, losing trillions of dollars of value.
Chinese stocks still had been trading near five-year lows despite those measures, making buying shares feel “like catching a falling knife,” Ipek Ozkardeskaya of Swissquote said in a commentary.
Investors registered their enthusiasm in online comments, with some saying they expected Wu, whose full name is a homophone for characters meaning “ruthless” in Chinese, to live up to his nickname of “Broker Butcher.”
Markets in Shanghai and Shenzhen have languished, partly because of heavy selling of property shares following a crackdown on excessive borrowing by developers as defaults among dozens of developers undermined confidence in the government’s efforts to revive the economy following the pandemic.
Authorities recently have sought to relieve some of the pressure on the real estate market by freeing up financing that might enable developers to finish projects imperiled by their financial woes.
China’s CCTV state television network reported that banks were extending nearly $2.5 billion in loans to 83 real estate projects chosen for support as part of measures to rescue the industry.
The shakeup at the CSRC came during a week that has seen wild swings in share prices and despair among investors who have seen their investments evaporate. China’s leaders may be hoping to turn a new page: markets are due to be closed for a week beginning Friday for the Lunar New Year holiday, allowing the dust to settle.
The effort to calm the markets has gained urgency as top officials prepare to gather in Beijing in early March for the annual meeting of the national congress, a time when the Communist Party showcases its accomplishments and sets new financial targets.
The ruling party has been exhorting state media and others with influence to promote confidence in the markets and the economy, which is forecast to slow further this year from the 5.2% official growth rate reported for 2023, one of the lowest in decades apart from the years of the pandemic.
In further evidence of weakness, the government reported yesterday that consumer prices fell 0.8% in January from a year earlier, the lowest level since September 2009 amid the global financial crisis.
In a New Year’s address yesterday, President Xi Jinping urged fellow leaders to “effectively strengthen economic vitality, prevent and resolve risks, improve social expectations, consolidate and enhance the upward trend of economic recovery, continue to improve people’s well-being, and maintain harmony and stability in the overall social situation.”
Economists say that restoring strong and sustained growth will hinge on reforms needed to make China less reliant on investments in construction and export manufacturing. Prolonged weakness in the property market and share prices has dented consumer confidence, hindering that transition. ELAINE KURTENBACH, BANGKOK, MDT/AP
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