Xiao Gang was removed as chairman and Party leader of the China Securities Regulatory Commission (CSRC) on Saturday. Liu Shiyu, former chairman of the Agricultural Bank of China, replaces him during this turbulent time in the Chinese stock market.
 
Speculation that Xiao would leave the post has been circulated online for months. Reuters even reported Xiao’s resignation last month, but the news was denied. Amid the steep plunge in the stock market, voices requesting Xiao’s removal were frequently heard in the Internet.
 
Authorities gave no detailed explanation regarding Xiao being removed. Public opinion cannot define the nature of Xiao’s dismissal immediately, for example, whether he is held accountable or change to another post, or is it because of age limit.
 
Blame on Xiao tapered off when he was removed. Many believe that last year's turbulence in the stock market cannot be entirely attributed to Xiao. The internal problems of the Chinese stock market have made the CSRC an unfavorable institution for officials.
 
Some even recalled his positive side, for launching a number of reforms. However, the effects of the reforms have been offset by the steep plunge in the stock market.
 
Public complaints indicate that Xiao didn't do his job well enough. The circuit breaker mechanism that was suspended just days after being introduced revealed defects in his decisions.
 
The CSRC is unlikely to be almighty in managing China’s unpredictable stock market, but most people hope that the watchdog can at least bring some confidence. Xiao has failed to properly handle the people’s expectations for the CSRC which were too high and unrealistic. Besides, when some senior CSRC officials were arrested, the combined effect dealt a heavy blow to the institution’s integrity.
 
Xiao has been unlucky. He took over the CSRC when the Chinese economy was facing downward pressure. Chinese stock investors like to follow the idea of “policy market” but blame stock market losses on the government. Xiao was like a small boat struggling with the huge waves in the stock market.
 
The CSRC chairman is one of the most frequently changed positions. It is hoped that Liu will succeed in dealing with the challenges of the Chinese stock market.
 
Liu may need to first clarify what the CSRC's mandate is. It is not supposed to manage  the stock market's movements but its sound development. Liu has to clearly define how to soundly develop the market, where the market stands and is headed. 
 
While investors expect a chairman that can provide assurance, this is no easy thing to do. A healthy Chinese stock market depends on the development of relevant mechanisms and reasonable investors. This, however, cannot be achieved merely by the CSRC's diligence. It requires tests.