Communicating policies a healthy way to strengthen the market

China's capital market gained a shot in the arm on Wednesday after a meeting presided over by Vice-Premier Liu He heralded measures to maintain its stable operation.

The meeting held by the Financial Stability and Development Committee of the State Council pointed out that the relevant departments should earnestly shoulder their responsibilities, actively introduce market-friendly policies and prudently adopt contractionary policies. All policies that have a significant impact on the capital market should be coordinated with the financial authorities before being introduced to maintain the stability and consistency of policy expectations, it said.

The People's Bank of China, China Securities Regulatory Commission, China Banking and Insurance Regulatory Commission and other relevant departments successively issued statements, stressing the need to maintain policy and expectation stability and consistency, help stabilize the macroeconomic market and financial operation, and guard against systemic financial risks.

In this context, a timely meeting organized by the financial authorities to clarify policy directions and respond to sensitive market issues touched the market's pulse and boosted investor confidence.

The capital market being the barometer of economic development, its fluctuations reflect the problems relevant industries face. In the face of increasing uncertainties affecting stable growth, timely and appropriate policy interpretations and tone-setting from the authorities can help the market better judge development expectations.

Wednesday's meeting made it clear that relevant departments should promote standardized, transparent and predictable regulations of the platform economy and other market issues in accordance with the principles of marketization, law-based governance, and internationalization. Such positive signals will promote the stable and healthy development of the platform economy.

Financial authorities must pay timely attention to the issues concerning the market at a time when the domestic capital market suffers drastic fluctuations. For any market fluctuations caused by the introduction of regulatory policies, the financial authorities should communicate with the market in a timely manner to ease the worries and concerns of investors due to their inadequate understanding of regulatory policies.

This requires financial authorities to continuously improve the information disclosure mechanism.