The Chinese government has taken unprecedented steps to stave off a crash in its stock markets, which have plunged since mid-June on concerns over the slowing economy and an unexpected devaluation of the yuan in mid-August.
Following is the timeline of interventions, announcements and rumours. For China market reports, please click [.SS].
For an abridged graphic version of the timeline click tmsnrt.rs/1fuUXmF
** Sept 7 – China removes personal income tax on dividends for shareholders who hold stocks for more than a year, halves tax on dividends for those holding shares between a month and a year.
– Chinese exchanges say mulling “circuit breaker” to CSI300 index that would briefly suspend market trade if the index rises or falls 5 percent, suspending trade for a day if it rises or falls 7 percent.
** Aug 28 – The SSEC ends up 4.8 percent after rising 5.3 percent a day earlier amid signs of revived market-rescue measures, but the benchmark index is still down 7.9 percent for the week as few investors are sure how long official support will last and where the market is heading.
** Aug 27 – A senior Chinese central bank official tells Reuters the global stock market rout of the past week was sparked by concerns over a possible U.S. interest rate rise and not by yuan devaluation. State media issues commentaries defending China’s policy making, showing Beijing’s sensitivity to suggestions it may have fumbled economic policy.
** Aug 26 – Regulators and police are cracking down on suspected violations of stock dealing rules and the fabrication of trading information, the latest in a slew of steps to clean up the market amid wild price gyrations.
** Aug 24 – Share indexes slump more than 8 percent, giving up all their gains for the year as the “national team” stays on the bench.
** The PBOC cuts interest rates and RRR for the second time in two months, ratcheting up support for the stumbling economy and the plunging stock market.
** Aug 23 – China allows pension funds managed by local governments to invest in the stock market for the first time.
** Aug 18 – Share indexes drop more than 6 percent amid worries of further yuan depreciation and over the fate of the equity market after the “national team” withdraws.
** Aug 14 – The CSRC surprises the market by announcing that Beijing will allow market forces to play a bigger role in determining stock prices, the first official signal that Beijing is moderating its efforts to prop up stocks.
** Aug 11 – The central bank devalues the yuan by nearly 2 percent, a move that was followed by further weakening of the currency in trading in following days. Policymakers describe the move as part of ongoing reforms but markets suspect political pressure is growing to weaken the yuan to boost ailing exports.
** Aug 10 – Reuters exclusively reports that the ruling Communist Party of China has begun looking for an eventual replacement for the top securities regulator, who faces internal criticism over his handling of this year’s boom and bust in Chinese stock prices.
** July 31 – Regulators say they have restricted 24 stock trading accounts for suspected trading irregularities.
Reuters exclusively reports China has asked financial institutions in Singapore and Hong Kong for stock trading records, widening its pursuit of investors shorting Chinese stocks.
** July 27 – After a few weeks of relative stability, share indexes slump again, with SSEC plunging 8.5 percent on the day, sparked by talk of a government withdrawal from market-rescue steps and worries over the health of the economy.
The CSRC says it is investigating share dumping incidents and vows further market support.
** July 8 – Chinese regulators come out with another series of support statements and measures, in particular raising margin requirements for short positions taken against the small-cap CSI500 Index, and making it easier for insurers to buy blue chips. The CSRC warns of “panic” and “irrational selling” in the market.
** July 6 – Main stock indexes open up more than 7 percent on the rescue measures, but give back most gains during the day, with the SSEC closing up only 2.4 percent.
** July 5 (Sunday) – China state-owned investment company Central Huijin Investment Ltd says it has recently purchased exchange-traded funds (ETFs) to support the market and will continue to do so.
The growing number of state agents and brokerages and other entities enlisted into the market rescue effort are soon dubbed “the national team”.
The CSRC announces that PBOC will inject liquidity directly to the state-backed margin finance company to stabilise the tumbling stock market.
** July 4 (Saturday) – China’s top 21 securities brokerages pledge to invest at least 120 billion yuan ($19 billion) collectively to help stabilise the market.
Twenty-eight Chinese companies planning to list on the country’s stock exchanges say they would suspend their initial public offering plans.
** July 3 – China Financial Futures Exchange (CFFEX) suspends 19 accounts from short-selling for one month. SSEC loses 5.8 percent despite the regulator’s efforts to stop the slide.
** July 2 – The CSRC announces relaxation of rules on margin trading before market open, lowering threshold for individual investors to trade on margins and expanding brokerages’ funding channels.
The CSRC announces setting up a team to look into illegal manipulation and investigate cases if needed.
** July 1 – Stocks tumble again, surrendering much of the previous day’s sharp gains to end down around 5 percent. After the market closes, the Shanghai and Shenzhen stock exchanges announce plans to lower securities transaction fees by 30 percent from August.
** June 29 – The state-backed provider of margin financing, China Securities Finance Corp, publicly says that the risk of margin trading is controllable and margin calls are relatively small.
Main indexes shrug off the monetary easing to end down over 3 percent after a day of see-saw trade, leading domestic media to call it “Black Monday”. The benchmark Shanghai Composite Index closes down 3.3 percent.
** June 27 (Saturday) – The People’s Bank of China (PBOC), the central bank, cuts interest rates and trims banks’ reserve requirement ratios (RRR) in a move widely interpreted as mainly a step to support the slumping stock market.
($1 = 6.4 yuan)
(Reporting by Lu Jianxin and Pete Sweeney; Editing by Kim Coghill and Jacqueline Wong)