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.'