Top financial regulators expected to discuss better communication skills during ‘two sessions’
Beijing’s increasingly centralised decision-making process has created contradictions and confusion, analysts say
China’s top financial officials will be under unprecedented pressure to discuss how to send clearer signals to the market when they attend the “two sessions”, starting this week, although economic growth will remain the key focus.
The annual meetings of the National People’s Congress (NPC), starting on Saturday, and the Chinese People’s Political Consultative Conference (CPPCC), starting on Thursday, were not designed to be platforms to discuss capital market issues, said independent financial commentator Brett McGonegal, but China’s decision makers were under pressure to address the unusual volatilities stemming from its markets that had disturbed investment at home and abroad since last year.
Alex Wolf, emerging markets economist with Standard Life Investments, said more uncertainties had been spawned by mainland China’s financial regulators since last year, as the “decision making process become more centralised”.
“When people become uncertain about what is happening and confused about policy directions, they tend to over react, particularly on negative messages,” he said.
“They (top decision makers) may need to create a super regulator, regardless of whether it’s led by the central bank or in another format, as discussed after the stock market rout in summer, to coordinate different commissions, and give consistent orders.”
We need the regulator to tell us what exactly are the clues and logic for developing the market
The Chinese regulators, from the securities market watchdog to the central bank, sent confusing and contradictory messages to the global investment community last year.