CHINA TOPIX

11/02/2024 09:38:28 am

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China's Top Security Regulator is Stepping Down, Says WSJ

Stepping Down?

(Photo : Reuters) The resignation of Xiao Gang, chairman of the China Securities Regulatory Commission (CSRC), is expected within the coming days.

China's top securities regulator is stepping down as the country's leaders move to dispell rumors of disarray in the management of the economy and spell out the specifics of how the government intends to supervise China's economic transition, sources with direct knowledge of the matter told the Wall Street Journal on Friday. 

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An official announcement on the resignation of Xiao Gang, chairman of the China Securities Regulatory Commission (CSRC), is expected within the next few days, according to the WSJ, which cites unnamed Chinese officials.

Xiao is expected to be replaced by Liu Shiyu, the current chairman of the Agricultural Bank of China and a former deputy governor of the People's Bank of China (PBOC).

Xiao and the CSRC have apparently been faulted for ill-advised policy moves after the Shanghai and Shenzhen markets saw a steep rise until the middle of June last year, then a sharp fall.

Circuit-Breaker

There had been reports that Xiao offered to resign in January, when a "circuit-breaker" mechanism he championed went dramatically awry.

The mechanism was intended to limit market sell-off in the wake of official announcements on China's economic slowdown and the subsequent restructuring of the country's economy.

Investors claim, however, that the "circuit-breaker" contributed to a series of precipitous declines in the market in the first days of trading this year, tottering investor confidence and setting off market jitters.

The Chinese government abandoned the mechanism after only four days in use.

The WSJ reports the leadership change at the securities agency has already been approved by China's Central Organization Department.  Xiao will be re-assigned as secretary-general of the State Council where he will counsel Chinese Premier Li Keqiang on economic issues.

Zombie Hunt

This news developed as China's top economic policymakers gathered in Beijing on Friday to present a unified message on the government's efforts to build a consumer-driven economy, shedding its reliance on cheap exports abroad and infrastructure investments at home.

Yang Weimin, a deputy director at the Office of the Central Leading Group for Financial and Economic Affairs, said Beijing's efforts to restructure China's economy are crucial to the country's future economic progress.

"If we miss the window of opportunity," the WSJ quotes Yang as saying, "we would suffer severe consequences."

The next two years are critical to the reduction of the nation's debt and the shuttering of "zombie" businesses and factories, Yang said.  He took aim at those who oppose Beijing's reform agenda by continuing to contribute to the country's problems with overcapacity.

"Those responsible for overseeing state assets shouldn't drag their feet just because shutting those firms would decrease the amounts of assets they oversee, and local governments shouldn't protect zombie firms," said Yang.  

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