August 08, 2015

"While Nie’s in the spotlight, that doesn’t mean he’s in control..."

Business Report After China’s stocks crashed in June, the government put more than $400 billion at the disposal of a little-known state agency, the China Securities Finance Corporation, headed by an academic and bureaucrat named Nie Qingping. It was told to save the market. via Bloomberg

'The agency’s unique mandate is to intervene in the market to buy stocks, with money borrowed from the central bank and other sources, in order to help prop up share prices. With the recent volatility evidenced by another crash on July 27, its success so far isn’t readily apparent.

'Nie, the 53-year-old chairman, hasn’t given interviews on his emergency role, and the government hasn’t spelled out exactly what discretion Nie and his agency have when executing orders from above. Four weeks into the new role, the picture emerging from Nie’s published books and commentaries, as well as interviews with fellow academics, is of a professor with 25 years of experience watching stock manias - who still got blindsided by China’s latest crisis.

'“The latest rally has the characteristics of a structural bull market,” Nie wrote in an article in March, joining a chorus of officials and state-media commentators talking up the market’s prospects. As one of the architects of China’s move to allow margin financing, in which people borrow money to buy stocks, Nie played down concerns that debt-funded stock purchases were rising too quickly.

'Now, Nie faces a “Herculean task” as head of an agency that never expected to be handed the role of market saviour, according to Liu Yuhui, a Beijing economist and a researcher at the Chinese Academy of Social Sciences.'

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