China names new chief for securities regulator

Mr Liu Shiyu (left), chairman of the Agricultural Bank of China and a former deputy governor of the central bank, replaces Mr Xiao Gang (above) as chairman of the China Securities Regulatory Commission.
Mr Liu Shiyu, chairman of the Agricultural Bank of China and a former deputy governor of the central bank, replaces Mr Xiao Gang (above) as chairman of the China Securities Regulatory Commission.PHOTOS: REUTERS
Mr Liu Shiyu (left), chairman of the Agricultural Bank of China and a former deputy governor of the central bank, replaces Mr Xiao Gang (above) as chairman of the China Securities Regulatory Commission.
Mr Liu Shiyu (above), chairman of the Agricultural Bank of China and a former deputy governor of the central bank, replaces Mr Xiao Gang as chairman of the China Securities Regulatory Commission.PHOTOS: REUTERS

Top state banking executive appointed following months of stock market turmoil

SHANGHAI • China has removed the chief of its securities regulator following months of stock market turmoil and appointed a top state banking executive to replace him, as leaders move to restore confidence in the economy.

The announcement on the official Xinhua news agency yesterday follows a string of assurances from senior leaders after the Chinese New Year holiday that China will underpin its slowing economy and steady its wobbly currency.

Xinhua said Mr Xiao Gang, chairman of the China Securities Regulatory Commission (CSRC) since 2013, had been replaced by Mr Liu Shiyu, chairman of the Agricultural Bank of China and a former deputy governor of the central bank.

"Xiao's departure is not a surprise following the recent stock disaster. This is a role vulnerable to public criticism because most Chinese retail investors are destined to lose money in such a market," said fund manager Zhang Kaihua of Nanjing- based hedge fund Huyang Investment.

Mr Xiao and the CSRC came under fire as the Shanghai and Shenzhen stock markets slumped as much as 40 per cent in just a few months in the middle of last year.

The gyrations in China's stock markets, an unexpected devaluation of the yuan in August and sharp falls in currency reserves rattled global markets, raising concerns about the health of the economy and Beijing's ability to steer the country through both a protracted slowdown in growth and a shift away from manufacturing towards services.

In a further blow, a stock index "circuit breaker" introduced in January to limit stock market losses was deactivated after four days of use because it was blamed for exacerbating a sharp sell-off.

The gyrations in China's stock markets, an unexpected devaluation of the yuan in August and sharp falls in currency reserves rattled global markets, raising concerns about the health of the economy and Beijing's ability to steer the country through both a protracted slowdown in growth and a shift away from manufacturing towards services.

Economic growth slipped last year to 6.9 per cent, stellar by Western standards, but the weakest pace for China in more than two decades.

Ahead of two high-profile events for China - a meeting in Shanghai this week of G20 financial leaders and the annual gathering of China's legislature next month - officials have announced various measures to support the economy, including funds for infrastructure projects and increased financial support to struggling industries.

Investors and analysts said Mr Liu, 54, a trained economist, would bring in new policies and strategies, but it remained to be seen what direction he would take.

"Liu has a lot of experience in the financial sector, but there will be some policy uncertainty in the short term as it will take at least six months for the former banker to get used to his new role," fund manager Zhang said.

REUTERS

A version of this article appeared in the print edition of The Sunday Times on February 21, 2016, with the headline 'China names new chief for securities regulator'. Print Edition | Subscribe