China Securities Regulatory Commission (CSRC) in Beijing Photo:VCG

China's top securities regulator on Sunday vowed to encourage and support investment institutions to enhance their deployment in counter-cyclical arrangements while guiding more medium- and long-term capital inflows, along with other measures to stabilize market confidence and expectations. 

Observers said that the measures will have a positive impact on stabilizing the market and expectations through policy guidance, and they remain optimistic about China's stock recovery despite bouts of volatility.

The China Securities Regulatory Commission (CSRC) held a meeting on Sunday chaired by its chairman Yi Huiman. 

The meeting focused on deploying targeted work to stabilize the country's capital market with sweeping measures, according to a post released by the commission on Sunday.
 
The meeting aimed at stabilizing the market, which has been facing downward pressure recently, Xi Junyang, a professor at the Shanghai University of Finance and Economics, told the Global Times on Sunday.

Under the current circumstances, Xi emphasized the importance of guiding the capital market through policies while implementing positive measures to propel the development of the market with favorable conditions and environment.  

Hu Qimu, a deputy secretary-general of the digital-real economies integration Forum 50, told the Global Times on Sunday that positive signals are necessary to boost confidence and will be conducive to the market's growth.

Hu noted that the steady growth of the domestic stock market will also amplify the wealth effect, which will help boost other sectors such as consumption, with positive spillovers expected to affect other sectors in the economy as well. 

"Reasonable guidance for market expectations will address some of the current obstacles," Hu noted. 

In addition to the above-mentioned support, the measures mentioned during the meeting cover a wide range of aspects from effectively solving specific obstacles faced by listed companies through research and visits, strengthening efforts to support high-quality firms seeking IPOs, improving the quality of listed companies and strictly cracking down on illegal activities such as market manipulation and malicious short-selling. 

The meeting stressed the significance of taking investors' concerns into consideration and giving timely responses to their concerns, and protecting investors' legitimate rights and interests. 

It also emphasized that the commission will elevate efforts to promote the implementation of targeted measures for stabilizing the market and expectations, while resolutely guarding against abnormal market fluctuations.

Despite the current volatility, with some Western media outlets hyping claims that international investors are abandoning Chinese stocks and redirecting investment toward other markets, observers noted that investors are actually showing renewed interest in Chinese stocks.

In an interview with the Global Times recently, renowned international investor Jim Rogers said that he is seeking new investment opportunities in China. 

"I would suspect that we're getting near the bottom if we're not already there, because when a government takes strong measures, it usually helps the market," Rogers said in the interview. 

Investors poured almost $12 billion into Chinese equity funds in a week in January in the largest inflow seen since 2015 and the second-largest ever, Reuters reported on January 26. 

Chinese authorities have been ramping up efforts to stabilize the capital market with corresponding measures and policy support. 

An executive meeting held on January 22 by the State Council, China's cabinet, stressed the need to further improve the capital market's fundamental system, paying more attention to maintaining a dynamic balance between investment and financing, enhancing the quality and investment value of listed companies, increasing flows of medium- and long-term funds into the market, and strengthening the market's inherent stability, the Xinhua News Agency reported. 

The meeting pledged to boost capital market regulation and take stronger, more effective measures to stabilize the market and improve market confidence. Meanwhile, efforts will be made to enhance the innovation and coordination of policy tools, consolidate and strengthen the trend of economic recovery, and promote the stable and healthy development of the capital market. 

In a recent move by the CSRC, the authority announced earlier in January that it will suspend lending of restricted stocks to strengthen the supervision of short-selling, while it will limit the efficiency of some securities lending in the securities refinancing market.