Beijing: China has vowed to stabilize its stock markets after the share prices on the Shanghai Stock Exchange plunged on Monday, the largest single-day drop since June 2007.
China Securities Regulatory Commission (CSRC) will continue to take measures to stabilize the stock markets, Global Times cited analysts as saying. The analysts added that fears that the government may halt support measures may have triggered the drop.
The CSRC also said that it will look into the possibility of malicious short-selling activities, and welcome public support in identifying alleged short sellers and “severely” punish offenders, the media report said.
The benchmark Shanghai Composite Index plunged 345.35 points to close at 3,725.56 points on Monday, while the Shenzhen Component Index fell by 1,025.46 points, or 7.59 percent, to 12,493.05 points.
Li Daxiao, chief economist at Shenzhen-based Yingda Securities, was quoted as saying that the weak economic data is only a minor reason for souring market sentiment.
“The more important factor is that some stocks on the two bourses are still overvalued, leading to the market correction,” Li told the Global Times on Monday.
Authorities announced measures to arrest the market slump that began on June 12. It includes a relaxation on margin trading rules – using borrowed money to invest in the market – a ban on major shareholders from selling within six months and a crackdown on “malicious” short selling.
“If the market remains turbulent, the government may roll out additional measures to back the stock market,” Liu Xuezhi, an analyst at the Bank of Communications, told the Global Times.
Authorities in the Chinese capital have placed a number of high-profile dissidents under police guard and stepped up city-wide security ahead of a high-profile conference showcasing President Xi Jinping’s “Belt and Road” global infrastructure plan.
The Belt and Road Forum will see 37 heads of state and government converging on Beijing from Thursday through Saturday, including leaders of Austria, Hungary, Italy, and Russia.
International Monetary Fund managing director Christine Lagarde, and U.N. secretary-general Antonio Guterres are also expected to attend, according to China’s foreign minister Wang Yi.
Residents of Beijing said police are now routinely stopping people on the streets and checking their ID.
“They are checking ID in Beijing right now, asking passersby where they are going, and where they came from,” a resident surnamed Liu told RFA. “Around the Southern Railway Station, they have drafted in a bunch of young police officers from I don’t know where, with dogs.”
“They are also running security checks and checking ID at the metro stations,” Liu said. “It’s really tight, as if we’re on high alert,” she said.
She said the security measures at the Southern Railway Station began on April 18.
“Things are so strict in Beijing right now,” housing rights activist Ni Yulan told RFA on Wednesday. “Basically, nobody from out of town is allowed into Beijing, and they have placed sensitive figures, such as dissidents and petitioners, under control and surveillance, so they can’t move around freely.”
“They are now paying close attention to people they didn’t particularly care about before,” she said. “The family members of anyone pursuing a complaint [against the government] are now really affected.”
Beijing resident Qi Zhiyong, who was maimed when a People’s Liberation Army (PLA) tank ran over his legs on the night of June 3, 1989, during the bloody crackdown on the student-led pro-democracy movement, said he has been under close surveillance since Monday.
“They have been on duty watching me since April 22, and limiting my freedom,” Qi said. “They are watching me because the Belt and Road Forum is about to open.”
Qi said his movements will likely be restricted until April 29, and that he isn’t the only one being targeted.
“[Democracy activists] He Depu, Gao Hongming, and Zha Jianguo, also Hu Jia, Zhang Baocheng, and Li Wei were all placed under surveillance from April 23,” he said. “Also, they’re detaining petitioners now. If they find them during an ID check on the streets, they’ll detain them.”
Wu Shuyun, a petitioner from the southwestern Chinese city of Chengdu, said many petitioners had been refused train tickets to Beijing when they tried to buy them ahead of the forum.