Huang Xiangyuan: Analysis Of Self Repair And Self Regulation In The Market

As the top leader of one party and one country, Xi Jinping commented on the stock market directly, which is very rare in history.

However, the great instructions of Xi Xi did not bring the so-called "good" which people usually expect, but let the market take a reassurance with unparalleled honesty.

Only rational and sustainable.

The openness of the supreme leader is more truthful and more rational than any so-called good. Therefore, it is more credible and reliable. Based on the reporter's question, he questioned the rescue operation directly, saying that the rescue measures taken by the stock market this summer seem to run counter to your country's reform commitments (that is, let the market play a decisive role).

In this regard, Xi did not have much to say.

He said that some time ago, China's stock market experienced abnormal fluctuations, which was mainly caused by the early rising too fast and the sharp fluctuations in the international market.

Xi's analysis of the cause of the bailout is straightforward and frank, straight and vigorous.

He, like Prime Minister Li, believes that stabilizing the market is aimed at preventing the spread of risks and preventing systemic financial risks.

This is not to replace or weaken the market function, but the international practice, and also in line with China's national conditions.

As he pointed out very clearly, at present, the important direction of China's economic restructuring is to make the market play a decisive role in the allocation of resources and better play the role of the government. In short, the "invisible hand" and "visible hand" should be used well.

Generally speaking, the domestic market has no objection to the bailout market, but there is no doubt about how to save it.

The main reason is that the SFC has been trying hard to make sure that under the circumstances that the index has not really stabilized yet, the certification company will not intervene directly under normal circumstances.

The stock index went down sharply and fell even worse than before the bailout, until today it is still around 15% below the rescue market.

This is also the reason why Xi did not simply adopt the argument that the rescue market had been completed successfully.

He pointed out that the market has entered the stage of self repair and self adjustment after the comprehensive adoption of various stabilizing measures.

The question is, why is this emphasis not on saving the market but on "self repair and self regulation"? How long will this "self repair and self regulation" stage take place?

On the one hand, the market's "self repair and self regulation" is multifaceted, and more depends on the re examination of the "fairness, impartiality and openness" of the market rules, not just the performance of the index in a short time. On the other hand, the amendment of the securities law is also necessary to learn the necessary experience and lessons from the stock market volatility.

However, as Xi pointed out, developing the capital market is the direction of China's reform and will not change because of the stock market volatility.

In this regard, we have more reasons to strengthen our confidence.

It is under the role of high leverage, with the venue

With the rapid growth of off site and foreign capital allocation, the serious bubble phenomenon of "excessive upsurge" has occurred before, and the potential risks of the financial system are likely to explode due to the large fluctuations in the international market at any time.

It is also because of this, I have repeatedly pointed out before, this time the rescue of the market, rather than the rescue of the index, not as leveraged.

The efforts made by the SFC in eliminating the hidden danger of leverage are far more than the investment in the rescue fund, and the difficulty is not simply measured by the rise or fall of the stock index.

If we say, the SFC has done so before.

To a large extent, the introduction and popularity of the market have been catered for and encouraged by the market. Now, the palm of the hand is as uncomfortable as holding a hot potato.

Despite the slight restraint and prudence in the process of deleveraging, as of the 23 day, the OTC allocation has been cleared by about 69%, and in the field financing is rarely forced to close. But if the index is too fast, it will be hard to guarantee that it will be unable to wait for the capture of the trapped capital and run away like the previous one.

This is probably the policy side, hoping to make greater use of the market's "self repair and self regulation" rather than just the real reason for saving the market.

What I can't see is that at present.

"Self repair and self regulation" is actually a process of strengthening the mind and dispelling evil.

It is necessary to eliminate a few or even a few batches of black sheep, but it is more important to find out what is the right direction of reform.

If this problem is not clear, just like the introduction of leveraged technology, more and more new ones do not mean new progress, nor do they represent new fairness or even the only new pursuit.

If we break away from our national conditions and violate the basic principle of protecting the interests of the vast majority of investors, we will never take too much advantage of the principle of "taking advantage of foreign affairs".

On this issue, this stock market crash is no doubt another profound lesson.

Therefore, before the "self repair and self regulation" of the market has not been completed, it is not appropriate to rush out the registration system reform according to the original plan.