CHINA'S securities watchdog has pledged to strengthen communications with relevant government departments in an attempt to reduce volatility in the stock market caused by policy changes. China Securities Regulatory Commission (CSRC) vice-chairman Li Jiange said the commission would place more emphasis on explaining new policies before they were introduced and implemented. 'China is just in the transitional period to a market economy,' he said. 'It is normal for some policies to be adjusted in the process of reform.' He said enterprises should not only improve their operations and flexibility, but also strengthen communications with investors, market analysts and the media. Mr Li himself was only willing talk to reporters briefly. When Shanghai Hai Xing Shipping announced in November that Beijing had scrapped the interest subsidies for fixed asset investment, investors dumped the H shares, complaining about the company's delayed disclosure of the change. Hai Xing received the directive in March and was effective since January last year, but was only disclosed in November. Mr Li attributed the delay to problems of delivery of documents. He stressed that Hong Kong would be maintained as the major market place for Chinese enterprises' overseas listings. In addition to Hong Kong, China has earmarked mainland companies to list in the United States and Singapore and is planning to float them in Japan and Australia.