China Orders No Market Turbulence Ahead Of Party Congress
The most important event in China in five years is about to take place, and Beijing isn’t taking any chances.
Ahead of the Communist Party’s twice-a-decade congress – an event so massive that according to Bloomberg “nothing escapes its pull” – which is slated to start on October 18 in Beijing, regulators have made it clear to the nation’s top brokers, bankers and financiers that they don’t want to see any major turbulence in markets.
In a repeat of the fiasco that followed the bursting of China’s equity bubble in the summer of 2015 when Beijing effectively nationalized the stock market, and went so far as to throw prominent hedge fund managers and assorted “speculators” in prison, the China Securities Regulatory Commission has ordered local brokerages to “mitigate risks” and ensure stable markets before and during the Communist Party’s leadership congress next month, according to Bloomberg. Additionally, to leave virtually nothing to chance – and to have ready scapegoats in case someone does in fact sell – the CSRC also banned brokerage bosses from taking holidays or leaving the country from Oct. 11 until the congress ends.
Brokerage bosses were told to avoid travel of any kind from Oct. 11 until the congress ends, including business trips.
Luckily for them, China’s national day holidays are coming up in the first week of October. Local markets will be shut for an entire week, providing plenty of time to recharge for the congress.
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