The China Securities Regulatory Commission (CSRC) has announced the approval of seven new initial public offerings (IPOs) after the seven applicants passed stringent review.

In a statement, the Chinese securities regulator said the seven companies, which include FLYCO Group Co Ltd, Zhejiang Lang Di Group, and Shandong Swan Cotton Industrial Machinery Co Ltd, are expected to raise a combined Rmb2.6 billion (US$400 million).

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Four of the seven companies will be listed on the Shanghai Stock Exchange while two will be listed on the Nasdaq-style ChiNext. One will be listed on the small and medium enterprise board of the Shenzhen bourse.

The approval of the new IPOs could test investors' response to the recent stock market turmoil in China, which even resulted to the axing of the chief stock market regulator.

The regulatory halted the IPOs in July of last year but resumed them last November. For the entire 2015, a total of 220 companies were approved for IPOs, raising Rmb157.8 billion.

The total amount of IPO fundraising in 2015 was more than double the amount raised in the previous year.

The stock market regulator, however, admitted in an interview with CNN that the stock market circuit breaker mechanism launched on 1 January was not an appropriate policy for China.

CRSC vice chairman Fang Xinghai told CNN that China thought the circuit breaker could work in the country because the mechanism has been practiced in a lot of Western markets.

However, since China's market is dominated by small investors, Fang said there is a lot of pressure for selling. The circuit breaker was canceled on 8 January following plunges that closed trading early.

The circuit breaker had very tight limits, suspending trading when stocks dip by 5 percent, which did more harm than good, analysts said.

TagsChina IPO, China stock market, China Stock Exchange