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Daniel Ren

Fang Xinghai, the key man behind Shanghai’s plan to develop the metropolis into an international financial centre, has stepped down as vice-chairman of China’s securities regulator amid a lumbering stock market.
Li Ming, former chief of the regulator’s enforcement bureau, will replace Fang, who crossed the official retirement age of 60 in May, according to a statement published by the China Securities Regulatory Commission (CSRC).
The reshuffle has triggered worries about Beijing’s reforms for the stock market, where a crisis of confidence has knocked the benchmark Shanghai Composite Index down 11.4 per cent over the past 12 months.
Two sources familiar with the workings of the CSRC said Fang’s removal had been expected because of his age, but the promotion of Li, 56, reflected the Chinese leadership’s resolve to weed out market irregularities to shore up investor confidence.
Top policymakers have placed a lot of faith in Li, a technocrat, expecting him to clean up the embattled securities sector, they added.

The latest changes comes after the government appointed Wu Qing as the CSRC chairman in February. Li will report to Wu, who has been tasked with reviving the fortunes of the stock market.
It remains to be seen whether the CSRC will stick to its reform agenda and widen access for overseas capital to mainland-traded stocks and bring the market on par with international practices.
“Fang, with his plain-speaking style, was viewed by millions of Chinese investors as a key supporter of stock market reforms, giving full play to market forces,” said Wang Feng, chairman of Shanghai-based financial services group Ye Lang Capital. “He was also a strong advocate for opening up the market to international players. His retirement is likely to slow down the internationalisation of China’s capital market.”
Fang received his PhD in economics from Stanford University and worked with several organisations, including the World Bank, in the US.
In 1998, he was invited by Zhou Xiaochuan, then head of China Construction Bank, to return to China and join the state-owned lender.
Two years later, Fang joined Galaxy Securities as a member of the brokerage’s administration committee. He also served as deputy general manager of the Shanghai Stock Exchange between 2001 and 2005, before moving to the Shanghai Financial Service Office.
As the head of the local government agency tasked with implementing crucial reforms to transform the mainland’s most developed city into a global financial hub, Fang played an important role in a series of liberalisations involving freer cross-border capital flows, establishing Shanghai as an onshore yuan trading centre and launching financial derivatives such as crude oil futures.
In 2013, Fang was brought in as a senior official at the Office of the Central Leading Group for Financial and Economic Affairs, which is in charge of drafting major financial policies for the Central Committee of the Communist Party. He was promoted to CSRC vice-chairman in 2015.
Fang and Chinese President Xi Jinping briefly worked together in Shanghai when Xi was appointed the city’s Communist Party chief in 2007.
He has been urging Beijing to set up an international board at the Shanghai Stock Exchange, to allow international behemoths like HSBC Holdings and Coca-Cola raise capital and list, since 2008. But the plan was put on hold in 2016 when a market meltdown deterred Beijing from deregulating the market amid fears an influx of fresh equity could further dilute holdings.
Li has headed the CSRC’s enforcement bureau responsible for policing the market and cracking down on illegal securities activities since 2022.
In February, he told a press conference that punishment for illegal behaviour in the securities industry should be “severe”.
The veteran bureaucrat also has experience in leading the regulator’s listing department that oversees share offerings, the over-the-counter National Equities Exchange, and Jiangsu branch of the CSRC.


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The top bureaucrat has been replaced by Li Ming, 56, who sources believe has the leadership’s backing to weed out irregularities and shore up investor confidence


The top bureaucrat has been replaced by Li Ming, 56, who sources believe has the leadership’s backing to weed out irregularities and shore up investor confidence.
