The China Securities Regulatory Commission's recent declaration of "effective measures" taken by it and other government departments to stem financial risk in the aftermath of the country's 2015 stock market collapse marks a hollow claim of victory. Regardless of how the market is now moving, to suggest that it is back to "business as usual" is highly misleading.
The CSRC's mid-August statement highlighted several points in claiming that the market has returned to normal: the relatively strong performance of China's main stock indexes this year; comparable price-to-earnings ratios for domestic indexes as compared with those of global markets and the fall of some PE ratios from previous eye-catching highs; stable market operations with healthy volumes trading and settling each day and stocks moving generally within a narrow daily range; and the continuing opening of new investor accounts.
