Newsmaker - Xiao Gang
Published 13/07/2015 | 02:30
The man with the unenviable task of halting the "Great Fall of China," Xiao Gang took over as China Securities Regulatory Commission (CSRC) in 2013.
Previously chairman of Bank of China, one of the country's biggest banks, Xiao Gang was one of a number of senior officials elevated around the same time, which was also when Chinese President Xi Jinping and Premier Li Keqiang too office, in what was very much a managed leadership transition.
As securities regulator, Xiao Gang's role is to oversee what has been a new and rapidly growing market for traded stocks and bonds.
Unlike many senior Chinese official, whose hair can look incongruously youthful atop ageing faces, Xiao Gang, 56, has allowed his hair to grey naturally since taking office.
But he is an insider. The fluent English speaker worked in a number of positions at China's central bank for more than 20 years, including as a deputy governor before moving to Bank of China and then the CSRC.
As head of the CSRC, Xiao Gang is now in the eye of a massive financial storm. In the last week in particular the regulator became a key instrument in Chinese government efforts to stall a stock market collapse that threatened to spiral out of control after a 30pc price collapse.
Up to recently, Xiao Gang, and the rest of the Chinese leadership, were happy to sit back and watch the markets soar. But efforts to stall the inevitable crash, which finally came over the past month after the stock market doubled in value in a year, have spooked outsiders by revealing the radically interventionist mindset that was probably always inherent in the Communist state's attitude to capital markets.
In the long term the cure for the crash - including bans on some share selling to stop prices falling - may prove more damaging to outside perceptions of China's markets than the crash itself. In his defence, in April Xiao Gang warned of the dangers of overheating, telling investors to stay "rational and calm", and publicly reminding buyers that they were inexperienced when it came to handling volatility.
China's stock markets are dominated by individual retail investors that swelled from 95 million to 111 million accounts this year, many borrowing from local banks to fund punts.
The boom and bust is a major challenge for Xiao Gang, who will have wanted to avoid a repeat on his watch of previous crashes in 2008 and 2009. That boat has sailed, and after the past week so too has any chance of presenting China's stock exchanges as a normally functioning extension of global markets.
Burned local investors may well shy away from further investment, cutting off capital raising for firms. International investors will also look askance at a regime that preferred mass trading halts rather than allowing markets to set prices, regardless how messy that process.