CSRC stresses risk prevention in steadier market

BEIJING -- China's securities watchdog said it will attach greater importance to risk prevention in the stock market in 2017.

The China Securities Regulatory Commission (CSRC) will keep a close eye on financial conditions both at home and abroad and be prepared, said its assistant chairman Xuan Changneng.

He made the remarks Saturday at the 21th China Capital Market Forum on financial regulation, saying the CSRC has a bottom line of risk control.

The stock market in 2016 was much steadier compared with a year earlier, he said.

Only seven trading days registered changes beyond two percent from March to December last year, and the benchmark Shanghai Composite Index gained 15 percent in the period, he said.

The two stock exchanges both saw fluctuations of less than 10 percent in the second, third and fourth quarters, he added.

IPOs and refinancing by cash raised 1.33 trillion yuan ($190 billion) last year, up 59 percent. IPOs hit a five-year high, Xuan said.

The bond market also flourished, with non-financing enterprises issuing 2.87 trillion yuan of bonds last year, up 170 percent, he said.

Xuan said last year's progress was marked by action against wrongdoing as well as a vibrant market.

Lai Xiaomin, president of China Huarong Asset Management Co, a major state-owned asset management company, said financial risks were generally controllable, but challenges remain.

Lai, attending the same forum, highlighted the buildup of non-performing loans, a slower economy, shortage of liquidity and squeezed profit space as major risks.

He called for better corporate governance structure to hold directors and supervisors responsible, while stepping up regulation and granting greater authority to regulators.