China’s securities regulator lays out his bottom line for corporate governance to undergird markets for external shocks
- The Shanghai index tumbled last week as trade war escalated
- Analysts are concerned about a heavier decline if the US extends tariffs to US$325 billion of Chinese goods
China’s securities regulator has reiterated his resolve to crack down on malfeasance, outlining four types of corporate activities that breach the bottom line of good governance, as the country’s stock market reeled from a week of roller-coaster swings.
“Corporate governance forms the pillar and the foundation of the capital market, without which a solid financial system cannot exist,” said the chairman of the China Securities Regulatory Commission (CSRC) Chairman Yi Huiman, during an event by the Association of public companies in Beijing. “Listed companies and major shareholders must strictly abide by four best practices of good corporate behaviour: no false information disclosure, no insider trading, no manipulation of stock prices, and nothing that harms the interest of listed companies.”
“The key point is corporate governance, including information disclosure and internal control,” Yi said, adding that the regulator will tighten the rules governing listed companies to improve the quality of listed companies.
Raising US tariffs to 25 per cent from 10 per cent on an extra US$325 billion of Chinese goods could affect about 0.5 percentage point of China’s gross domestic product, Fitch Ratings said.
