Wen warns China will do what it takes to rein in stock market
China's Premier Wen Jiabao has warned his government will do what it takes to prevent bubbles and fluctuations in the stock market, state media said Monday.
"The government will take measures to prevent asset bubbles and avoid huge fluctuations in the stock market," Premier Wen Jiabao told reporters, according to the China Daily website.
"Preventing asset bubbles is like preventing inflation and it is the government's responsibility to ensure a fair, healthy and transparent stock market," Wen said.
Wen's statement could signal a more active approach to reining in the stock market after last month's 17th Communist Party Congress, China's most important political event for the past five years, analysts said.
They argued that prior to and during the week-long congress, politicians had been reluctant to tamper with the stock market for fears of a plunge in share valuations could have triggered unrest.
"(Wen's statement) is in line with our expectation that regulators would feel less constrained to take actions to curb (stock market) bubbles after the Party Congress," Deutsche Bank chief economist Jun Ma said in a research note.
Wen made the remarks over the weekend while in Uzbekistan attending a regional meeting, the paper said.
The premier said all measures will be market-oriented options rather than administrative actions.
Wen said the stability of a stock market relies on two basic factors, including the quality of listed firms and a transparent market which protect not only the interests of enterprises, but also those of consumers.
"With more people having entered the stock market, abnormal fluctuations affect both the national economy and the interests of shareholders, so the government will closely watch developments," he said, according to the paper.
China's stock market has more than doubled so far this year, after surging about 130 percent in 2006. Shares fell 1.42 percent in Monday morning trade.
AFP
