BIZCHINA / Biz Who
China didn't trigger global stocks rout
(Reuters)
Updated: 2007-03-05 13:52
China's stock market is too small and has too little foreign
participation to be blamed for triggering last week's rout in global
share prices, the country's securities regulator said on Monday.
Shang Fulin, chairman of the China Securities Regulatory Commission [File
photo]
"China's stock market right now is relatively small and not very
globalize. So it's not possible for it to have such an impact," Shang
Fulin, chairman of the China Securities Regulatory Commission (CSRC),
told reporters.
A plunge of 8.84 percent last Tuesday in the benchmark Shanghai Composite
Index, the biggest drop in a decade, served as a wake-up call to global
investors that they had been underpricing risk assets around the world.
Weak U.S. durable goods orders and worries about defaults on poor-quality
mortgages later drove U.S. share prices sharply lower. Global markets
have been struggling to stabilize ever since.
But Shang said each market behaved according to its own characteristics.
"Markets in different countries are mainly influenced by their own
domestic conditions and will influence each other according to the
globalization of their market," he said on the sidelines of the annual
session of the National People's Congress, China's parliament.
Shang said the question of whether the CSRC would assume oversight of
China's corporate bond market was under active consideration.
The National Development and Reform Commission (NDRC), the top planning
agency, is currently responsible for approving new issues.
Critics complain that the NDRC's conservative issuance criteria have
stunted volumes at a time when developing the capital markets should be a
priority for a country where banks provide some 80 percent of companies'
external funding.
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