China currency

China replaced the head of its market watchdog Wednesday in an apparent attempt to restore confidence in financial markets following a prolonged downturn.

Official media said Wu Qing, a former chairman of the Shanghai Stock Exchange, would replace Yi Huiman as chairman and Communist Party chief of the China Securities Regulatory Commission.

Chinese stocks have been trading near five-year lows despite various measures to stabilize the markets.

The official Xinhua News Agency gave no reason for Yi’s departure but Chinese media said Wu was nicknamed “Broker Butcher” for his tough stance on enforcing rules against various abuses.

Wu, a banking industry veteran, is also a former vice mayor of Shanghai.

Markets in Shanghai and Shenzhen have languished, partly due to heavy selling of property shares following a crackdown on excessive borrowing by developers.

Earlier this week, the CSRC said it was cracking down on insider trading, market manipulation and other crimes and would protect small investors.

The appointment came during a week that has seen wild swings in share prices and despair among investors who have seen their investments evaporate.

Thousands have vented their frustrations on the U.S. Embassy’s blog, lamenting about the stock market’s woes in a seemingly unrelated post about protection of giraffes — a tactic reflecting the narrow scope for expression in China’s Communist Party-controlled media environment.

“Buying Chinese equities feels like catching a falling knife,” Ipek Ozkardeskaya of Swissquote said in a commentary.

The efforts so far “have been inefficient to trigger a sustained recovery and they will hardly bring investors back on board,” Ozkardeskaya said of measures that included a pledge by a state investment fund to step up purchases of exchange-traded funds. “Throwing money into the mix is a clumsy quick fix, it won’t fix confidence.”

China faces both short- and longer-term challenges that economists say will require substantial reforms to keep its economy growing at a robust pace.

The property market, a major driver provider of jobs and consumer demand, fell into crisis when developers defaulted on debts and became unable to deliver apartments to buyers who had already paid for them with their life savings.

By removing Yi, China’s leaders may be hoping to turn a new page with the beginning of the Lunar New Year. The country will close down for a week-long holiday from Friday, leaving time for markets to settle.

The effort to calm the markets has gained urgency as top officials prepare to gather in Beijing for the annual meeting of the national congress, a time when the Communist Party seeks to showcase its leadership and set new financial targets.

That image has been tarnished in recent years by an erratic and often heavy-handed approach to Covid-19, including monthslong lockdowns that drastically restricted travel and work for tens of millions of people.