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China Securities Regulatory Commission Chairman Xiao Gang addresses the Asian Financial Forum in Hong Kong January 19, 2015. REUTERS/Bobby Yip (CHINA - Tags: POLITICS BUSINESS) - RTR4LXJL
Reuters/Bobby Yip
Xiao Gang speaking in Hong Kong in 2015.
OUSTED

China’s top stock market regulator has been dismissed

By Zheping Huang

The head of China’s top market regulatory agency, the China Securities Regulatory Commission (CSRC), has just been dismissed, the official Xinhua news agency said on Saturday (Feb.20) morning.

Xiao Gang, 57, “was removed from his post,” Xinhua reported, and replaced by Liu Shiyu, current chairman of the Agricultural Bank of China. Liu, 55, used to serve as a deputy governor of the Chinese central bank before he joined the bank in 2014.

The Communist Party’s central committee and the State Council fired Xiao after months of criticism of his performance as the lead stock regulator in the country, and growing criticism of the government’s overall management of China’s slowing economy. Still, his nearly three years as CSRC chairman made him one of the longest-serving.

In January, Reuters reported Xiao had offered to resign, citing unnamed government sources. At the time, the CSRC refuted Reuters’ report, and the news agency’s Chinese news account on Sina Weibo was deleted.

Before his departure, the CSRC struggled to manage China’s volatile stock markets. The Chinese bourses have experienced several “bear markets” in the past 12 months, even though the central government intervened by spending more than $1 trillion to keep markets afloat. Xiao reportedly was behind a new market circuit-breaker—a mechanism that temporarily stops trading when the stock market falls sharply—that failed to stem market volatility, and dried up liquidity instead. It was scrapped days after it went into effect at the beginning of this year.

China’s retail investors appeared to cheer Xiao’s dismissal. Many wrote on Weibo that they believe the stock market will have a surge on Monday because of the “good news.”