Premier Li Qiang called for more effective measures to stabilize China’s slumping stock market after the mainland’s benchmark CSI 300 hit a five-year low on Monday.
Chinese stocks have sold off for most of the past year. The factors behind the drop range from the protracted crisis in the housing market to persistent deflationary pressures in the wider economy. Beijing’s policy response, meanwhile, has failed to buttress sentiment among investors hoping for even easier monetary conditions or a big lift in fiscal stimulus.
At a meeting on Monday chaired by Li, the State Council, China’s cabinet, emphasized the need to enhance the quality and investment value of listed companies, according to a report by state-run China Central Television.
Other remedies discussed included getting more medium and long-term funds to invest in and stabilize stocks, as well as strengthening the regulations that govern capital markets, the report said. China also needs to improve the consistency of its macro policies in order to consolidate the nation’s economic recovery, it said.
Li’s call comes at a worrying time for China’s stock markets, which could be facing a fresh wave of index selling tied to so-called snowball derivatives.
