The leader of China’s securities regulatory agency delivered a message Saturday calling on the nation’s massive $13 trillion investment fund sector to back homegrown innovation while cautioning against risky speculation and market hype.
Wu Qing, who heads the China Securities Regulatory Commission (CSRC), addressed a conference where he emphasized that investment managers should avoid making reckless wagers on specific industries or creating new funds during market peaks to generate quick profits.
The remarks arrive during intense technology rivalry between China and the United States, alongside worldwide investor enthusiasm for artificial intelligence developments.
“China’s booming emerging and future industries urgently needs capital support,” Wu said in a speech posted on the watchdog’s website.
According to Wu, the nation’s fund sector should concentrate on national priorities while working to “improve global competitiveness and the ability to cope with external shocks.”
Wu delivered his address one day following the CSRC’s decision to strengthen monitoring of the nation’s $3.4 trillion private fund sector, coming weeks after Beijing restricted “illegal” international investment activities.
At the same time, market instability is growing worldwide. U.S.-listed semiconductor companies dropped sharply Friday, eliminating approximately $1.3 trillion in market capitalization.
“External uncertainties are rising, global financial markets are fluctuating at high levels and global assets are undergoing a major rebalancing,” Wu said.
“At the same time, a new wave of technological revolution led by artificial intelligence urgently needs a more compatible financial system.”
Wu called on the country’s private equity companies to assume a more “strategic and fundamental” position in backing innovation, while increasing long-term investments in early-stage, advanced technology startups.
Investment managers should also adopt emerging technologies like AI to enhance their operations, Wu noted. However, he cautioned against market hype, complex investment frameworks and excessive speculation.
Oversight agencies will also strengthen monitoring of automated program trading to establish fairer market conditions and prevent improper technology usage, Wu stated.
