Amid stock turmoil, China replaces securities regulator

Feb. 7 (UPI) -- China's Communist Party Central Committee Wednesday replaced the nation's securities regulator, appointing Wu Qing to replace Yi Huiman amid turmoil and a downturn in China's capital markets.

Wu will become chairman of the China Securities Regulatory Commission, according to Chinese state media agency Xinhua.

In a statement, the China Securities Regulatory Commission said it is responding to market conditions with a series of measures to "strengthen supervision on the securities lending business in light of market conditions."

"The CSRC will crack down on the use of securities lending transactions to implement improper arbitrage and other illegal activities in accordance with the law to ensure the smooth operation of the securities lending business," the CSRC said.

Wu is known as the "Broker Butcher" for cracking down on securities traders.

His appointment is part of an effort to stabilize the Chinese stock market as it deals with property sector volatility, which has led to investor negative outlooks on Chinese economic performance.

China's manufacturing is also in a four-month decline.

The CSRC said it will suspend the scale of new securities trading, setting the limit at "the current balance of securities lending."

Securities companies will also be required to "strengthen the management of customer trading behaviors, and strictly prohibit the provision of securities lending to investors who use securities lending to implement intraday reversal transactions."

Supervision and enforcement efforts will also be increased, according to the CSRC.

CSRC is also following a zero-tolerance policy on short selling, essentially investor bets that specific assets will drop in price.

Chinese stock markets this week managed to stabilize after suffering a serious decline in 2023. Roughly $6.1 trillion in market value has been lost since 2021 in the Chinese and Hong Kong stock markets.