Investors check stock prices at a securities brokerage in Nanjing, Jiangsu province, Oct 19, 2018. [Photo/IC]
BEIJING - Chinese Vice-Premier Liu He said Friday that many factors had caused obvious stock fluctuations and declines in China recently, including interest rate hikes by the central banks of major economies and Sino-US trade frictions.
The global stock market started seeing fluctuations and downward movements after the interest rate increases, and the US stock market has also seen obvious corrections, said Liu, also a member of the Political Bureau of the Communist Party of China Central Committee.
"Sino-US economic and trade frictions have also impacted the stock market, but frankly speaking, the psychological effect is bigger than the actual impact," said Liu.
"China and the US are now in contact with each other," he said.
Apart from external factors, China's economic restructuring has also had an inevitable effect on the stock market, according to Liu.
Changes in market expectations and uncertainties over the future economic environment also influenced the behavior of investors, who are very concerned about issues such as the development of the private economy and property rights protection.
In addition, some technical factors existed, said Liu, citing passive reduction of stock positions amid market slides as an example.
Citing international investors and domestic analysts, Liu said China was becoming the most valuable market for investment, from the perspective of global asset allocation.
Market bubbles have sharply contracted, the quality of listed firms is improving, while valuations are at historic lows, he said.
"Many institutions therefore suggest that great attention be given to Chinese bourses, believing that China's stock market already has a relatively high investment value," Liu said.
With the aforementioned evaluation, Liu said that he believed investors would make rational judgments.
"The corrections and sell-offs on the stock market are creating good investment opportunities for the long-term and healthy development of the stock market," he said.
He stressed that the government highly valued the healthy, stable development of the stock market.
Noting that investors had strong expectations for institutional innovations and reforms, Liu stressed the importance of working out new targeted reform measures to promote healthy development of the stock market.
He expounded on policies and measures announced Friday morning, in the areas of stabilizing the market, reforming market institutions, encouraging long-term funds to enter the market, facilitating reforms of state firms and development of private firms, as well as further opening up.
"The country will continue to open its doors wider on all fronts and accelerate the opening up of banking, securities and insurance industries," he said.
Noting that this year marked the 40th anniversary of China's launch of reform and opening up, Liu said major policies and principles of reform and opening up had already been set and it was key to implement them well.
"Now we have arrived at the crucial point where one action is better than a dozen principles," he said, urging all sides to make greater efforts, have a stronger sense of responsibility and move fast to roll out concrete policies for the healthy development of the stock market.