China goes hi-tech to police markets

AS securities regulators intensify their multi-front crackdown on stock speculation, they are stepping up their policing capability by investing up to 600 million yuan (about HK$556.86 million) in a comprehensive central database system.

The China Securities Regulatory Commission (CSRC) is understood to have fleshed out a plan for a database system linking the country's two stock exchanges and the 14 futures exchanges for monitoring trading patterns and price movements.

The system, which will tap the latest optic-fibre technology, is expected to be set up over the next five years under the direction of CSRC deputy director Li Jiange.

'Yes, we are planning to set up a central database system as part of our risk-control efforts, but I am not aware how much it will cost,' a CSRC official said.

Plans to beef up the regulatory hardware came as regulators launched a clampdown on the Shanghai and Shenzhen markets, which have risen about 50 per cent since the beginning of the year.

These gains triggered an unprecedented rush by investors in the country clamouring to open accounts. Last month alone, 1.15 million trading accounts were opened with the Shanghai exchange, equal to the total for the past three months. As of May 9, the exchange had 14.6 million investors, up 21 per cent from December last year.

Sources said regulators felt an urgent need to set up an advanced computer system to monitor the rapidly expanding but scandal-ridden markets.