Daily Management Review

Beijing’s Regulatory Crackdown Not Aimed To Restrict Private Firms, China Assures Wall Street


The aim of the recent sweeping regulatory crackdown on domestic companies by Chinese authorities is not aimed at reining in private enterprises of the country or decoupling them from the United States or the international financial markets, a top official of China’s regulatory body reportedly told World Street leaders in an interaction last week.  
China Securities Regulatory Commission (CSRC) Vice Chairman Fang Xinghai reportedly said at a private gathering that the actions against domestic Chinese companies was aimed at strengthening the regulation of consumer-facing platform companies and has a  crucial role in promoting "common prosperity", or bringing down wealth inequality ion the country, said reports quoting people who attended the gathering.
"I don't think you can find a government anywhere in the world that is as positive and as focused on technology as China," Fang was quoted as telling the fifth China-U.S. Financial Roundtable (CUFR) last week.
It was expected, for example, that Chinese authorities would approve a record number of initial public offerings this year and private companies would comprise the majority of firms going public in China, Fang reportedly told the gathering,
There were no comments available on the issue by CSRC and Fang.
The unprecedented regulatory crackdown on companies in China was referred by Fang in his remarks towards the closing of his presentation, said reports. The regulatory crackdown in Chinese companies has resulted in billions of dollars being wiped out in market value off some of the best-known private firms of China and has dented the confidence and sentiments of foreign investors.
According to a Bloomberg News report, the crackdown on various industries in China was defended by the CSRC during the roundtable meeting with Wall Street executives.
In recent years, the pace of opening up of its multi-trillion dollar financial sector to American companies has been speeded up by China following years of lobbying by Wall Street firms for greater access to the sector, even while tensions between Washington and Beijing have risen on a range of issues from trade to geopolitics.
However, some foreign investors have been rattled by some of the sweeping new regulations implemented by China targeting companies in a range of industries – from internet companies to for-profit education to online gaming and property market excesses. Investors are also worried about the "common prosperity" wealth-sharing drive of China,
In recent weeks, markets were attempted to be assured about the measures by Chinese officials and the country’s state media.
Earlier this month, attending a forum, China's Vice Premier Liu He assured that the policies and guidelines of the government would continue to support the private sector.
The Wall Street audience welcomed the comments made on the issue last week by Fang, who is also the president of the CUFR.
"They listened very intently to what Fang had to say and most of us were very satisfied," one of the reports quoted an attendee of the meeting as saying and referring to the Wall Street executives.
According to reports, about 35 people attended the meeting and included leaders from top Wall Street firms.