China’s tech surge: regulator chimes in with market-friendly policies to cheer beleaguered stock investors

China will encourage publicly traded companies to buy back their shares and money managers to invest in their own funds

The government will continue to widen access to the capital market and maintain Hong Kong’s market stability through stronger cross-border collaboration, CSRC said

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Investors stand in front of an electronic board showing stock information at a brokerage house in Shanghai on February 15, 2016. Photo: Reuters.

Published: 2:41pm, 17 Mar 2022Updated: 8:31pm, 17 Mar 2022

China will encourage publicly traded companies to buy back their shares and money managers to invest in their own funds, offering investor-friendly policies to bolster the world’s second-largest capital market amid an unprecedented rout.

The government will continue to widen access to the capital market and maintain Hong Kong’s market stability through stronger cross-border collaboration, the China Securities Regulatory Commission (CSRC) said on its website late Wednesday.

The CSRC’s statement came hot on the heels of a Wednesday meeting chaired by China’s economic tsar Liu He, in which he pledged to uplift the market and the economy.

Most importantly, the vice-premier asked that market-sensitive regulatory policies to be “coordinated with financial regulatory authorities in advance” to manage market reactions and expectations, according to the official readout of the meeting by Xinhua News Agency.

China’s vice-premier Liu He during trade talks with then US Treasury Secretary Steven Mnuchin and US Trade Representative Robert Lighthizer at the offices of the US Trade Representative in Washington, DC, in 2019. Photo: EPA-EFE

The instruction by Liu and CSRC’s follow-on policy sparked the biggest rally in Chinese tech stocks on record, undoing the worst two-day rout in onshore equities since 2015 earlier this week after JPMorgan Chase called the technology sector “uninvestable.”

“Short-term swings haven’t changed and will not change the healthy development in the long run,” the CSRC said. “The capital market has a solid foundation for smooth operations. Going forward, the CSRC will put out all the stops to ensure market stability by deepening and specifying work measures.”

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