CHINA’S measures to stabilize its stock market amid a US$3.5 trillion rout are temporary, a spokesman for the nation’s securities regulator said Friday.

    Steps taken by the government, such as a suspension of initial public offerings (IPOs) and a ban on share sales by major shareholders, won’t affect China’s market-oriented reforms, China Securities Regulatory Commission spokesman Zhang Xiaojun said at a weekly briefing. While necessary, the government action was temporary, Zhang said.

    When the stock market undergoes wild swings or other abnormalities, it is necessary for the government to step in and take measures such as slowing or suspending approvals of new initial public offerings, Zhang said.

    Zhang’s comments came in response to concerns that the country’s market-rescue efforts will hamper reforms that aim to let the market play a “decisive” role in the economy.

    China will continue to stick to its market-oriented reforms and this “did not and will not change,” he said. However, he did not mention an exit strategy for these measures.

    The government has taken unprecedented measures to stop the stock rout, arming a State-run financing agency with more than US$480 billion to bolster the market and allowing hundreds of companies to suspend share trading.

    “In the short term, this is going to have a negative impact,” said Li Bo, chief investment adviser at Guangfa Securities Co.’s Shanghai branch. “The worst crisis is over, but the market confidence is not back.”

    China pledged to end the existing approval-based IPO system and switch to a registration one, which Zhang said is a crucial part of China’s capital market reforms and should be done in a gradual and steady manner. (SD-Agencies)