BEIJING • The head of China's market regulator has issued an unusual apology for the volatility in the country's markets, acknowledging "shortcomings" in the way they have been supervised.
"The abnormal fluctuations on the stock exchanges have revealed the immaturity of the Chinese markets, inexperienced traders and a trading system that is imperfect," Mr Xiao Gang, head of the China Securities Regulatory Commission (CSRC), said on Saturday.
"They also exposed shortcomings in the supervision, as well as regulation mechanisms that are inappropriate and ineffective," he said, according to a transcript of a speech given to colleagues that was posted on the CSRC website.
"Certain institutions have allowed illegal and irregular transactions to prosper instead of upholding their responsibilities and stabilising the market."
His comments came after fresh losses last week on the Shanghai and Shenzhen markets, which had already shed about 40 per cent of their value last summer.
A so-called national team of institutional investors had promised at the time to buy and hold stocks on the benchmark Shanghai index until it returned to 4,500 points. However, the index fell through the lows seen during last year's crash, closing on Friday at 2,900 points - its weakest level since December 2014.
Irate retail stock investors crowded social media to gripe about Mr Xiao and threatened to sue state media for predicting a bull market revival that never happened.
Mr Xiao said "deep lessons" had to be learnt from the turmoil, with a push to "intensify reforms, reinforce supervision (and) support the development of healthy capital markets" by opening them up.
China's markets remain cut off from the rest of the world due to tight restrictions on capital flows.
AGENCE FRANCE-PRESSE, BLOOMBERG