COMPANIES listed in China have conveniently blamed bearish market sentiment on inconsistent securities policies and incapable Beijing officials. This, clearly, cannot be the case. To a great extent, companies have themselves to blame for the lackadaisical performance of their stocks. Just turn to the list of irresponsible behaviour cited by the China Securities Regulatory Commission (CSRC), the securities watchdog. Recently, the CSRC found out that more than half of the 169 annual reports it inspected failed to meet the minimum standards. Some companies fiddled their accounts, others simply could not be bothered to submit annual reports to the commission. Although the CSRC blamed sub-standard in-house financial controllers and auditors for the financial inaccuracies, companies' managements must surely bear the ultimate responsibility. The CSRC said it would fine some of those companies and, in serious cases, suspend their qualification to issue shares. It had better live up to its words, because too much is at stake for the fledgling markets, especially Shanghai, which aspires to be the premier financial centre. It is no secret that repeated attempts by the country's securities bodies to drum up foreign investor interest in the two markets have been less than successful. A major reason is the justified fear among foreign investors that they are not adequately protected by the regulatory framework. Top officials of the regulatory watchdog have said time and again the most urgent task facing China's securities market is to get companies to comply with the rules and regulations. This is especially crucial as the bears tighten their grip on the markets, which show no signs of recovery. What the CSRC and other related securities bodies do is bound to influence the securities markets. Warnings to companies to behave are not enough. They must make an example of the recalcitrant to show they mean business. Companies must be made to understand that unless they put their own houses in order, they will have to pay a price for it. And if that means getting the CSRC to wield the stick, so be it.