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China regulators deliver rare joint pep talk for worried markets
[SHANGHAI] Three of China's top financial officials launched a coordinated attempt to shore up confidence in the country's stock markets and economic prospects on Friday in an unusual expression of top-level concern over what one of them called "abnormal" share price falls.
The timing of the rare intervention by the heads of the central bank, securities commission and banking regulator - in interviews with Chinese media - comes amid a bruising stock downturn and were released ahead of data showing slowing economic growth.
"Momentum for the economy to maintain steady growth has increased," People's Bank of China governor Yi Gang was quoted saying.
"Overall, current stock market valuations are at historically low levels, which is in contrast with China's stable and improving economic fundamentals."
Markets are being pummelled by concerns over the economy, the escalating trade standoff with the United States and an official crackdown on excess debt leveraging in the financial system.
The government is becoming increasingly worried about the losses, which have made the country's markets the world's worst-performing in 2018, with the benchmark Shanghai Composite Index down around 30 per cent from its January peak and sitting at four-year lows.
The comments by Mr Yi as well as China Securities Regulatory Commission Chairman Liu Shiyu and Banking and Insurance Regulatory Commission chief Guo Shuqing are the most concerted effort yet in a series of recent top-level statements targeting concern over the equities decline and the economy.
They were aimed at easing fears China was swerving away from pledges of financial reform, and that private enterprises may suffer from a strengthening state hand on the economy.
Both the Shanghai index and the Shenzhen Composite Index, which tracks stocks on the country's second exchange, fell more than one percent at the opening on Friday.
But they quickly reversed course after the officials' comments and the economic growth figures filtered through the markets.
By late morning, the Shanghai index was up 0.65 per cent, while Shenzhen gained 0.75 per cent.
The government said the world's second-largest economy expanded 6.5 per cent in July-September, the slowest quarterly pace in nine years.
Banking regulator Guo said Chinese financial markets have recently seen "a large number of abnormal fluctuations due to various factors, which is seriously out of line with China's economic development fundamentals and inconsistent with the overall soundness of China's financial system".