The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookiesbefore using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

China's leaders hit the panic button

Look beyond the gyrations of its stock markets, and you can see one thing clearly in China: equivocation. The regime of Xi Jinping is fundamentally flawed because of its public espousal of the markets, but private refusal to cede any real control. Optimists hope the latest crisis could be the impetus for real reform. Most experts warn investors hoping for a recovery in their stock purchases not to hold their breath


After enduring a torrid summer that included two dramatic stock collapses, a double devaluation of its currency, and a fifth cut in interest rates in nine months in an attempt to boost flagging growth, China is facing a key moment in its modern history. Do the country’s authoritarian political leaders have the appetite – and the intellectual and ideological flexibility – to push through a slew of risky and painful financial and economic reforms? Or will they take a pass and hope they can muddle through, creating the services- and consumption-driven economy they so desperately need, almost by osmosis?

The most immediately pressing challenge will lie in reforming the country’s capital markets. This is not because China’s equity markets are integral to the wider economy. “There is little inherent connection between the two,” notes Thomas Byrne, head of Moody’s Asia-Pacific sovereign risk group. Fewer than one in 30 mainland citizens owns a listed security, reckons London-based Capital Economics.

Yet Beijing’s political leaders need to begin transforming their economy somewhere, and of all the hideous and manifold challenges they face – streamlining, merging or shuttering state-owned enterprises (SOEs); reducing the power of government-run lenders; and weaning the country off its dangerous addiction to eye-watering rates of economic growth — reforming the country’s stock markets should, in theory, prove a relatively simple task.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?