China replaces top markets regulator as Xi tries to end rout

China replaces top markets regulator as Xi tries to end rout

China replaced the head of its securities regulator in a surprise move amid a sharp recent selloff in the nation’s stock markets.

Wu Qing, a banking 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 the official Xinhua News Agency.

The shift comes after Chinese authorities struggled to halt a selloff in the world’s second-largest stock market with piecemeal support measures over the past few months. Chinese and Hong Kong equities have lost about $7 trillion of market value from their peaks in 2021.

“This is long overdue in my opinion, if one chief cannot do the job, then maybe we should give someone else a chance,” said Jiang Liangqing, managing director at Zhuhai Greenbamboo Private Fund Management. “Yi Huiman’s style is way too low key, he promotes respecting the market and keeping a light-handed approach, it has been proven that this doesn’t work here, not when our market is still in its early stages.”

The removal of Yi, who has been in charge of the CSRC since 2019, is reminiscent of move to appoint a new markets chief in 2016 after an epic selloff in stocks. While Yi’s abrupt dismissal was a surprise, Wu had last year been tipped to take over at the CSRC. He was previously deputy party secretary of Shanghai.

President Xi Jinping made prevention of major financial risks a top priority while officials strive to boost the post-Covid economy. Wu’s hardline approach and zero tolerance for wrongdoing might put him in the right seat to help achieve that goal.

His elevation was hinted at in 2022 when he was elected as an alternate member of the Communist Party’s Central Committee at the 20th congress. He also worked alongside Premier Li Qiang, when the latter served as party chief for Shanghai.