China’s new rules for asset managers draw applause but send stocks tumbling
Shanghai — China’s latest plan to rein in its shadow banking system is winning early plaudits from analysts, despite concern that it could fuel short-term market turbulence. The government directives, which are set to take effect in 2019, add to signs that President Xi Jinping is willing to sacrifice growth as he tries to put the world’s second-largest economy on a more stable financial footing. "The rules dealt a blow to the market," said Zhang Gang, a Shanghai-based strategist with Central China Securities. "A lot of such products had positions in the equity market, and those that don’t qualify under new rules may choose to exit some small and medium caps." The country’s financial watchdogs unveiled a proposal on Friday to overhaul regulation of asset-management products, which hold about $15-trillion and are seen as threats to stability in Asia’s largest economy. The draft rules mark the "beginning of a new era" in Chinese financial supervision, according to Citic Securities. Dav...
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