China, Battling a Stock-Market Rout, Replaces Its Top Securities Regulator

Yi Huiman, chairman of the China Securities Regulatory Commission, is being replaced by Wu Qing, deputy party secretary of Shanghai.
Yi Huiman, chairman of the China Securities Regulatory Commission, is being replaced by Wu Qing, deputy party secretary of Shanghai.

Summary

Beijing is intensifying efforts to stem a painful slump in share prices.

China has removed its top securities regulator, following a yearslong stock-market decline that has become an increasingly sensitive subject for Beijing officials in recent days.

Yi Huiman, chairman of the China Securities Regulatory Commission, is being replaced by Wu Qing, deputy party secretary of Shanghai, according to a state news agency.

The move came after increasing attempts by regulators and government officials to end Yi Huiman, chairman of the China Securities Regulatory Commission, is being replaced by Wu Qing, deputy party secretary of Shanghai, according to a state news agency., which has badly knocked confidence among individual investors in the country. Last weekend, thousands of angry individual investors flooded social-media posts from the embassies of the U.S., India, and Japan in China and aired their frustrations.

The decision to replace Yi has echoes of the ouster of another former CSRC head eight years ago. Xiao Gang oversaw the regulator during a sharp selloff in the summer of 2015 and introduced a circuit breaker mechanism, which brings an early halt to trading on days when stock prices have fallen sharply. The move exacerbated the loss of confidence, and in January 2016 Xiao was replaced.

The State Council, the country’s top government body, last month called for more to be done to stabilize the stock market and boost confidence, and the CSRC has since issued several statements attempting to calm investors’ nerves.

Yi chaired a meeting of the CSRC on Sunday, during which the regulator vowed to protect the stability of the capital market, according to official statements.

Stocks rallied on Tuesday after a unit of China’s sovereign-wealth fund said it had expanded its holdings of exchange-traded funds, which buy shares. The market also got support from further promises from the CSRC to boost confidence, and some changes to trading rules this week.

Chinese stocks rose on Wednesday before Yi’s removal was announced. The CSI 300 closed up 1%, while the Shanghai Composite Index ended the day 1.4% higher.

But the recent jumps haven’t made up for last month’s slide in Chinese stocks. The country’s benchmark CSI 300 index is down 2.5% this year, despite rising for three days in a row. It is now in its fourth year of decline.

The CSI 300 fell more than 11% in 2023, a contrast to rallies elsewhere: U.S. stocks are booming, and Japanese shares are trading around their highest levels in more than three decades.

Yi became head of the CSRC during another period of market weakness in 2019, replacing Liu Shiyu. Before that, Yi was chairman of the Industrial & Commercial Bank of China, the biggest bank in the world. After he had left the CSRC, Liu was charged with corruption.

Wu, the next CSRC head, has years of experience working at the regulator, as well as at the Shanghai Stock Exchange. He has a doctorate in economics.

Write to Rebecca Feng at rebecca.feng@wsj.com

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