Chinese Officials Plan Market-Stabilization Initiatives at NPC

In a move to mitigate the volatility in the stock markets of the world's second-largest economy, Chinese policymakers are gearing up to unveil new market-stabilization strategies.

The National People's Congress (NPC), China's paramount legislative assembly, has deputies who have prepared a collection of measures targeting the enhancement of market oversight and the reduction of investment barriers. At the forthcoming annual NPC policy sessions, these measures will be officially presented.

According to state media reports, Jia Wenqin, Beijing's head of securities management, will put forward proposals designed to dismantle 'hidden barriers' obstructing the flow of medium to long-term capital into the market. These include a strategy for better coordination between financial regulators and other governmental units, orchestrated by the Central Financial Commission.

Furthermore, she aims to make the market more enticing for insurers and pension funds, known for being significant investors of long-term capital. Concurrently, Sha Yan, Chairwoman of the Shenzhen Stock Exchange, advocates for a stepped-up crackdown on unlawful trading and stricter enforcement of regulations, alongside encouraging increased dividend payments by companies to enhance investor confidence.

These prospective regulatory actions are in line with the country's recent efforts to manage market turbulence. Actions have been taken against quantitative trading firms for irregular activities and a suspension of restricted stock lending has been imposed to limit short selling.

The NPC meeting, set to last seven days, is also anticipated to shed light on China's economic outlook for the upcoming year, including GDP growth targets and forecasts related to inflation and employment. The GDP growth target is particularly in focus as it is a performance indicator that China has rarely missed.

China, NPC, Stabilization