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 The announcement on the official Xinhua news agency on Saturday
follows a string of assurances from senior leaders following the
Lunar New Year holiday that China will underpin its slowing economy
and steady its wobbly currency.
Xinhua said Xiao Gang, chairman of the China Securities Regulatory
Commission (CSRC) since 2013, had been succeeded by Liu Shiyu,
chairman of the Agricultural Bank of China Ltd (AgBank) <601288.SS>
<1288.HK> and a former deputy governor of the central bank.
"Xiao's departure is not a surprise following the recent stock
disaster. This is a role vulnerable to public criticism because most
Chinese retail investors are destined to lose money in such a
market," said Zhang Kaihua, a fund manager of Nanjing-based hedge
fund Huyang Investment.
Reuters could not immediately reach the CSRC or Agricultural Bank of
China for comment.
Xiao and the CSRC came under fire as China's Shanghai and Shenzhen
stock markets slumped as much as 40 percent in just a few months
last summer.
In a further blow, a stock index "circuit breaker" introduced in
January to limit stock market losses was deactivated after four days
of use because it was blamed for exacerbating a sharp selloff.
Online media nicknamed Xiao "Mr Circuit Breaker".
Reuters reported in January that Xiao, 57, had offered to resign
following the "circuit-breaker" failure. The CSRC said at the time
the information did not conform to the facts.
The gyrations in China's stock markets, an unexpected devaluation of
the yuan in August and sharp falls in currency reserves rattled
global markets, raising concerns about the health of the economy and
Beijing's ability to steer the country through both a protracted
slowdown in growth and a shift away from manufacturing toward
services.
Economic growth slipped last year to 6.9 percent, stellar by Western
standards, but the weakest pace for China in more than two decades.
Ahead of two high-profile events for China - a meeting in Shanghai
next week of G20 financial leaders and the annual gathering of
China's legislature in March - officials have announced various
measures to support the economy, including funds for infrastructure
projects and increased financial support to struggling industry.
China's Commerce Minister Gao Hucheng said in an interview with
state television on Friday that he was confident that the country's
trade conditions would stabilize and improve in 2016.
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UNCERTAINTY AHEAD
Investors and analysts said the new chief Liu, 54, a trained
economist, would bring in new policies and strategies, but it
remained to be seen what direction he would take.
"Liu has a lot of experience in the financial sector, but there will
be some policy uncertainty in the short term as it will take at
least six months for the former banker to get used to his new role,"
fund manager Zhang said.
Andrew Sullivan, managing director, sales trading at Haitong
International Securities Group in Hong Kong, said that removing Xiao
had been largely expected.
"But by bringing in the AgBank chairman, they are really not
bringing anybody with a fresh market perspective but a political
insider," he said.
Liu spent most of his career at the People's Bank of China (PBOC),
rising to deputy governor and holding that post from 2006 until he
left in late 2014 to head up AgBank.
Xiao became the CSRC head in March 2013 and was charged with
attracting investment into equities and away from speculative
bubbles in sectors such as real estate, while defending against
endemic insider trading.
The Communist Party had described Xiao as "young, energetic,
resolute". He was also self-effacing, once saying the only thing
he'd done right in life was to marry his wife.
Xiao was previously chairman of Bank of China Ltd (BoC) <601988.SS>
<3988.HK>, China's fourth-biggest lender, and had worked at China's
central bank for over two decades.
(Reporting by Adam Jourdan, David Lin and Samuel Shen; additional
reporting from Saikat Chatterjee in Hong Kong; Editing by Tom Hogue
and Neil Fullick)
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