New | How Shenzhen-Hong Kong stock connect blunder reveals central bank governor's ambition to take charge of China’s capital accounts reform
PBOC’s error highlighted the overlapping responsibilities of China’s authorities
Zhou Xiaochuan is China’s longest-serving central bank governor and his ambition could provide a powerful goad for financial reform of the country’s capital markets.
On Wednesday, his remarks in an article that the Shenzhen and Hong Kong stock exchanges would forge a link before the years’ end took the markets by surprise and caused gyrations in what eventually turned out to be a PR blunder by the People’s Bank of China (PBOC).
While analysts said this was just the latest case showing the overlapping and contradictory responsibilities of departments in China’s government, there is no mistaking that Zhou is a man in a hurry to pry open China’s capital markets before his retirement which could come at any time.
Stocks, especially in Hong Kong, shot up because the Shenzhen-Hong Kong stock connect has been widely consigned by market players to start in 2016 after a massive rout scuppered a rally that hoisted shares in the city and on mainland China to a 7-year peak in June.
The PBOC clarified during the lunch break that Zhou’s comments were actually an extract from a speech he delivered nearly six months ago to staff on “party education”.
A key industry source very familiar with the progress of the scheme said that stock market watchdog, the China Securities Regulatory Commission was still working on the scheme and was not prepared to issue a timetable to roll it out.
