China’s ruling Chinese Communist Party (CCP) has replaced the head of its securities regulator, as public anger grows over the Chinese stock market crash.
Meanwhile, the communist regime has resorted to administrative intervention to stop stocks from plunging.
China’s stock market has continued melting down since the new year, reaching its lowest points in years just last week, with thousands of stocks hitting limit down. The plummeting stock market has seriously impacted the confidence of investors both domestic and foreign amid China’s slumping economy.
It’s estimated that 200 million Chinese have invested in the Chinese stock market, many of whom have taken to the U.S. and Indian embassies’ social media accounts to voice their anger against the CCP and plead for help to save the value of their investments in the Chinese stock market.
On Feb. 7, the CCP’s official state mouthpiece Xinhua suddenly announced that Yi Huiman, the chairman of the China Securities Regulatory Commission, was dismissed and replaced by Wu Qing. It was a decision made by the Central Committee of the CCP and its State Council.
It was noted by observers that before Xinhua News Agency released the announcement, the CCP’s Organization Department did not issue any internal announcements. Usually, the Organization Department makes internal notifications before important personnel changes are made public. According to reports, even senior officials within the China Securities Regulatory Commission were surprised by the sudden change.
Li Linyi, a U.S.-based current affairs commentator, pointed out that in terms of CCP procedures, after senior leaders make such personnel replacement decisions, they usually notify the Organization Department first and communicate with the related department in advance.
“This personnel appointment and dismissal [of the head of the securities regulator] shows that the situation is urgent. The CCP leader is very worried about the current situation of the stock market, so he hastily made the move to immediately remove Yi Huiman from his post and implemented it quickly. In other words, the decision made by the top leader reached the China Securities Regulatory Commission within the same day. So it surprised officials within the Commission. This also shows that China’s financial market is actually in a state of crisis.”
The first thing Mr. Wu did as the new head of China’s securities regulator was to punish technology companies and about 100 securities professionals with heavy fines and administrative punishment, as announced on Feb. 9 by the China Securities Regulatory Commission.
‘National Team’ Rescue
Meanwhile, the CCP has put a huge amount of national funds into the stock market to help stop the plunge in Shanghai and Hong Kong stock indexes through state-owned firms, which is known as “national team rescuing” the Chinese financial market.
Central Huijin Investment controlled by the CCP’s Ministry of Finance, a major player in the “national team,” stated on its official website on Feb. 7 that it has “already expanded the scope of buying ETFs in recent days.” It also vowed to “continuously enhance the act of buying and expand the size of holdings,” although no more details were given.
The Chinese stock index came back to above 2,700 before the stock market closed for a week on Feb. 9 for Chinese New Year holiday.
Frank Xie, associate professor of marketing at the University of South Carolina Aiken and an Epoch Times columnist, wrote on Feb. 9, that even though the CCP’s “national team” blatantly violated market principles to rescue the stock market, their actions have had little effect and the stock market will continue to fall.
“Despite high-level officials of the CCP directly intervening to bring China’s overseas funds back to China to rescue the stock market, the investors are still not optimistic about the market, and global investors continue to sell Chinese stocks,” he said.
Only Buying Allowed, Selling Banned
The China Securities Regulatory Commission also issued a number of orders to restrict short-selling on Feb. 6 to stop the stock index decline, only allowing buying stocks not selling them. The orders also banned bond and stock pledging, prohibited securities lending to investors who sold stocks on the same day, and vowed to crack down on short-selling methods for illegal escape and illegal gain.
U.S.-based current affairs commentator Shi Tao said during his talk show “Today’s Click” on NTD: “The purpose of trading stocks is to make money. What is illegal gain or escape? Stocks are sold and resold. Only buying is allowed but no selling is allowed, that is not a market. So he [CCP leader] used non-market methods to bring it back to 2,700 points. This is not a normal cycle, like a person, only taking in and not breathing out, will suffocate to death.”
Zhang Tianliang said of the new restrictions in his talk show “Tianliang Hour” on NTD on Feb. 9 that the CCP is ignoring market rules, adding that “only allowing buying but not selling was like robbery.”
The Chinese stockholders have expressed anger on social media over the “only buying no selling” rule.
Mr. Xie wrote that a large number of Chinese investors in China’s A-share market come from the hard-working working class. “Once the stock market crashes, these small individual investors will suffer the biggest and most direct impact, leading to large-scale wealth loss, bankruptcy, and despair.”
Mr. Xie added that in the investor structure of European and U.S. markets, the proportion of individual investors is relatively low, accounting for less than 20 percent of the market value.
“The number of individual investors in China accounts for more than 95 percent. Although the proportion of their shareholdings is not too high (most are held by institutional investors), these funds account for almost 100 percent of their personal and family disposable income, and their endurance for the ups and downs of the stock market is also very fragile.”
Xia Song and Li Jing contributed to this report
From The Epoch Times
