Laura Cha's appointment to the China Securities Regulatory Commission raises questions on the pace of Hong Kong's and China's corporate governance reforms. Business Post looks at the implications The appointment of Laura Cha Shih May-lung will be welcomed as a timely and necessary addition to help stiffen the spines of the mainland's stock market regulators. Her appointment as the vice-chairman of China Securities Regulatory Commission (CSRC) comes at a delicate time. It coincides with apparent division among central government officials over how hard they should crack down on such rampant market malpractices as insider trading and blatant market manipulation. The CSRC, which is caught in the middle, has been seen as vague in its official responses and weak in the enforcement of regulations. Mainland analysts said Mrs Cha was a good choice for the job, and was part of Premier Zhu Rongji's efforts to tap overseas regulators to help strengthen regulatory controls. Her first test will be her likely inclusion in the stormy debate among government economists and the official media over the health of the mainland's roller-coasting stock markets. On the one hand, Wu Jinglian, one of the mainland's most respected and most outspoken economists, reportedly described mainland stock exchanges as something 'worse than casinos'. Even gamblers at casinos had to follow rules, Mr Wu argued. Mr Wu's sharp comments and his perceived close links with Premier Zhu's office implied a government crackdown and helped send the A-share markets tumbling in the past few weeks. The markets have become even more nervous after the CSRC said it would investigate market manipulation following the publication of a tell-all article in which one of the mainland's 'super' speculators spilled the beans about a scam involving Shenzhen-listed China Venture Capital. In the first week after the Lunar New Year holidays, the combined value of the Shanghai and Shenzhen stock markets reportedly fell about 100 billion yuan (about HK$93.7 billion). With the stakes so high, other mainland interest groups have started to organise counter-attacks against Mr Wu's remarks in a bid to influence the government's decision-makers. On Friday, major financial newspapers splashed on their front pages a lengthy commentary by news agency Xinhua, designed to talk up the market. Market players assumed the latest example of Chinese authorities' standard practice of using Xinhua commentaries to sway markets was a sign the government had softened its stance - and sent the market up again. However, yesterday the Financial Daily reported Xinhua had denied it was a government-directed commentary. It said it was just an article written by two Xinhua journalists and somehow made it on to the front pages of those newspapers. Amid all these goings-on, the CSRC's official stance has been conspicuously absent. As Mrs Cha is expected to play a key role in regulatory controls, mainland analysts hoped her arrival would bring a change in the decision-making process of mainland regulators.