English English

By Xie Fang

China’s A-share market rose dramatically Monday after the country’s financial regulators took various measures to boost investors’ confidence, the Securities Times reported.

The benchmark Shanghai Composite Index was up by 4.09 percent to close at 2,654.88 points while the Shenzhen Component Index finished 4.89 percent higher at 7,748.92 points.

The significant surge in the A-share market came after China’s top financial officials conveyed their confidence in the Chinese economy on the media last week.

During an interview last Friday, Vice Premier Liu He said the ongoing correction of the A-share market is laying a foundation for the long-term and healthy development of the market and creating good investment opportunities.

Yi Gang, governor of the People’s Bank of China (PBOC), China’s central bank, said during an interview last week the recent market fluctuations were mainly caused by the expectations and sentiments of investors. He said the market capitalization of the A-share market is now at a historic low, standing in contrast to the steady and sound fundamentals of the Chinese economy.

Yi’s opinion was echoed by Guo Shuqing, chairman of China’s Banking and Insurance Regulatory Commission (CBIRC), who said at a meeting last week the recent abnormal volatilities in China’s financial markets were inconsistent with the generally stable condition of the country’s financial system.

Meanwhile, the Chinese government also took concrete measures to address investors’ concerns.

To reduce the number of listed-companies which transfer their stocks to securities firms as a pledge for loans, the Asset Management Association of China (AMAC), China’s top watchdog for the asset management industry, announced Sunday evening that the agency would simplify the approval procedure for any private fund or asset management plan which could help listed-companies refrain from pledging their stocks by participating in the restructuring or mergers of these companies.

The CBIRC also announced last Friday that it had begun soliciting public opinion on a new measure which would allow publicly-offered wealth management products to be directly invested in the A-share market, a measure aimed at bringing more funds to the stock market.

In an effort to boost domestic consumption, China’s tax authority also plans to deduct the expenditures on child education, continuing education and four other items from taxable income.