Surprise sacking hints at more forceful measures

Beijing has replaced the head of its securities regulator, a surprise move that may foreshadow more forceful measures by Xi Jinping's government to end the rout in China's US$8 trillion (HK$62.56 trillion) stock market.

Wu Qing, a banking and regulation veteran who earned the reputation as "the broker butcher" when he led a crackdown on traders in the mid-2000s, is replacing Yi Huiman as chairman and party chief of the China Securities Regulatory Commission, according to Xinhua news agency.

About US$5 trillion of market value had been wiped out from onshore equities from their peak in 2021, adding the urgency for policymakers to do more.

"More than anything I think it shows the authorities' resolve to end this rout and to turn things around," said Huang Huiming, a fund manager at Nanjing Jing Heng Investment Management.

"Announcing the personnel change right before the Spring Festival, with just one day left to trade, shows that the bid to boost confidence is real - it's saying to investors that the people at the top care about investment losses."

The removal of Yi, who has been in charge since 2019, echoes a 2016 head change after an epic selloff in stocks.

The abrupt dismissal of the 59-year-old was a surprise, as officials of his rank typically retire at 65.

China's previous moves to name new markets chiefs have proved a success in boosting shares. The benchmark CSI 300 Index rose over 40 percent in almost a two-year span after Liu Shiyu was assigned to replace Xiao Gang in February 2016. After Yi replaced Liu in January 2019, the gauge increased by more than 80 percent over the subsequent two years.

"It may raise market hopes for more forceful stock market rescue plans after the personnel change," said Xiaojia Zhi, head of research at Credit Agricole CIB.

"Wu is highly experienced with securities regulations with his work experience in the CSRC as well as in Shanghai Stock Exchange."

Wu, who will turn 59 in April, was deputy party secretary of Shanghai and has worked closely with Premier Li Qiang, who was previously party secretary of the nation's financial capital.

He previously headed the Shanghai Stock Exchange for almost two years and held various roles at the CSRC where he shuttered 31 firms over regulation breaches. Later, he oversaw the fund industry until 2010.