“Broker Butcher” Wu Qing is named the next chief of securities regulator by China

In order to help Beijing through the turbulent waters of a market slump, China’s Cabinet named Wu Qing, a seasoned investor, as head of the China Securities Regulatory Commission on Wednesday, according to official media Xinhua. Wu Qing replaced Yi Huiman in this role.

Wu, who went by the nickname “Broker Butcher” for his harsh measures against traders, had previously held the positions of chairman of the Shanghai Stock Exchange for over two years and acting vice mayor of Shanghai, a significant financial center in China.

2019 saw Yi, his predecessor, assume leadership of the CSRC and begin a series of broad changes aimed at the capital markets.

Wu’s appointment follows the announcement over the past two weeks by the CSRC of new supportive policies aimed at stabilizing and reviving China’s stock market, which has suffered due to volatility in the real estate sector and general investor pessimism regarding the future of the second-largest economy in the world.

The actions coincided with the CSRC’s announcement earlier this week of a strict new “zero-tolerance” policy against malicious short selling, which is the wagering that the price of a particular asset or group of assets will fall. Potential offenders will be warned that they will “lose their shirts and rot in jail,” according to Reuters.

A commission spokesperson stated on February 6 that “The CSRC will crack down on the use of securities lending transactions to implement improper arbitrage and other illegal activities in accordance with the law to ensure the smooth operation of the securities lending business.” The statement was translated into English by Google.

The situation was made worse on January 31, when China’s CSI 300 fell to a five-year low as the nation’s industrial activity declined for the fourth consecutive month. According to Bloomberg News, which cited unnamed sources, Chinese President Xi Jinping will speak with financial regulators about the state of the stock market. This comes after his speech last month, during which he praised the virtues of “high-quality financial development,” the “combination of the rule of law and the rule of virtue,” and the creation of a “financial culture with Chinese characteristics.”

Chinese Premier Li Qiang called for “more powerful and effective measures to stabilize the market and confidence” in late January, according to a statement translated by Google. This has raised expectations that Beijing, which has been reticent to date, will mobilize a sizable stimulus package amid growing concerns that deflation will stifle growth after the country’s economy recovered from the COVID-19 pandemic more slowly than expected.