China will replace the head of its securities regulator, state media reported Saturday, as the country struggles to curb volatility in its stock markets.
The ruling Communist Party has decided that Xiao Gang will be “dismissed” from the top position at the China Securities Regulatory Commission, the official Xinhua news agency said.
Liu Shiyu, chairman of the Agricultural Bank of China — one of China‘s top four banks — will replace Xiao, it said.
Xiao, 57, took over as chairman of the China Securities Regulatory Commission in March 2013.
He spent most of his career in China‘s banking system, including the central bank and the state-owned Bank of China, one of the country’s “Big Four”, which he headed for 10 years before moving to the CSRC.
In mid-2015 he oversaw a rout on China‘s exchanges, with the benchmark Shanghai index plummeting by almost a third, wiping trillions of dollars from market valuations and jolting global markets.
The plunge was triggered when regulators changed the rules on traders’ use of borrowed money, bursting a debt-fuelled bubble that had seen the Shanghai index surge 150 percent in the year to mid-June.
Calls for his departure have been heard regularly since the debacle and heated up early January after the CSRC’s deployment of a “circuit breaker” closed the Shanghai and Shenzhen exchanges early twice in the four days it existed, again roiling global markets.
At the time, many angry investors took to the Twitter-like Sina Weibo to condemn Xiao’s abilities as head of the regulator.
One user wrote: “(I) strongly urge Xiao Gang to step down. The stock market’s management is a mess and market disasters keep happening … Xiao Gang’s ability is poor and he is incompetent.”
Another wrote: “I have never heard that the index could fall to a stop in five minutes. Why does China always let the fools make decisions?”
Xiao himself revealed during a 2012 television interview that at school he preferred arts subjects such as poetry writing to mathematics.
He also said he “didn’t choose to learn finance” at college.
Xiao’s replacement, Liu, has spent most of his career in banking. He served as a vice-governor of the People’s Bank of China, the central bank, before being tapped as chairman of the Agricultural Bank of China, the country’s third largest lender.
In December the bank’s president resigned for “personal reasons” amid reports that he had been questioned in connection with a corruption investigation.
In January, Chinese media reported that two junior employees at a Beijing branch of the bank stole bills worth 3.9 billion yuan ($600 million) and sold them, then used the proceeds to invest in the stock market, sustaining huge losses during last year’s crash.