China’s chief stock regulator has offered to resign, sources say

China’s embattled top securities regulator has offered to resign, sources said, after perceived mismanagement wiped more than US$5 trillion off the capitalisation of the Shanghai and Shenzhen stock markets since they peaked in June 2015.

It was not known if Mr Xiao’s alleged resignation offer had been accepted by the central government. Both the CSRC and the government refused to comment. His term does not formally expire until end-2018.

An immature bourse and participants, incomplete trading rules, an inadequate market system and an inappropriate regulatory system were to blame and regulators will learn from their mistakes, Xiao said in transcript of an internal meeting of the China Securities Regulatory Commission that was posted on the agency’s website on Saturday.

Authorities introduced the system in the first week of January and scrapped it within four days after finding that it spurred investors to rush for the exits on big down days.

“The reform will be a gradual process and the IPO pace and pricing will not completely deregulated “all at once” as the regulator will seek to prevent a massive supply of new shares from burdening the market”, said Xiao.

“The abnormal market volatilities has substantially reflected the immaturity of the Chinese market and investors, the flaws in the trading and market system as well as the incompetence of the regulatory capability”, said Xiao. The turbulent start to 2016, with currency and stock markets tumbling, has stoked concerns that Beijing’s policymakers are fumbling as China heads towards its slowest annual growth in a quarter of a century. The chairman of the China Insurance Regulatory Commission (CIRC), Xiang Junbo is expected to be the leading candidate.

If confirmed as cabinet secretary-general, Premier Li Keqiang’s right-hand man, Huang would have to tackle a stalling economy and market turbulence as well as oversee the entire spectrum of portfolios: from industry to agriculture, energy, the environment, state planning and technology, according to a Reuters report last week.

The identity of the third short-listed candidate is not known.

“Stock investors shouldn’t celebrate yet”, said another. “Xiao Gang is just an actor…”

Hong Kong’s benchmark index dropped to its lowest level in more than three years on Monday, with investors’ risk appetites soured by resumed declines in oil prices plus Friday’s tumbles for share prices in the United States and Europe.

The Dow Jones industrial average fell 2.4 percent, the S&P 500 index slid 2.2 percent (a 15-month low), and the Nasdaq composite fell 2.7 percent.