A slew of market-stabilising measures unveiled by the head of China’s securities regulator this week has won praise from investors, despite the fact that mainland stock prices did not roar back over the following days.

The focus on supporting stocks and investor confidence over the long term, rather than deploying contingency actions to deal with short-term market turmoil, signalled a much-needed shift in Beijing’s strategy, industry players said.

Wu Qing, chairman of the China Securities Regulatory Commission (CSRC), pledged at a financial forum on Monday to attract fresh funds to Chinese markets through further opening-up policies and the approval of new exchange-traded funds (ETFs).

The regulator would also closely monitor the risk of contagion spilling over from overseas markets and encourage stock buy-backs by listed companies, he added.

While Wu’s speech did little to provide an immediate boost to stocks, with the benchmark CSI 300 Index falling more than 1 per cent this week, brokerages said the measures marked a shift in the regulators’ approach to managing market declines.

While direct state intervention remained an option, it might now be a tool that Beijing only turned to in extreme circumstances, they said.

“We can see from this round of market-stabilising efforts that the regulatory mindset has shifted to building up a regular system and away from resorting to short-term contingency measures,” said Cheng Qiang, an analyst at Topsperity Securities.

“Looking forward, inflows of fresh capital look certain, but that may take place at a measured pace rather than rapidly.”Wu said at the forum that the CSRC had approved 18 actively managed ETFs for the first time, a move that domestic media said would channel about 2 billion yuan (US$299.5 million) of fresh capital into the market.

Mainland China ETFs now have a total value of nearly 5 trillion yuan – bigger than actively managed funds in 2024.

Foreign ownership in China’s onshore stock market might also increase gradually over the coming quarters, Cheng said, as the CSRC was expected to further open up Asia’s largest stock market to global investors.

Real estate investment trusts and Hong Kong’s yuan-stock trading counter would be added to the cross-border Stock Connect programme, Cheng said, adding that the CSRC would keep fine-tuning policies to facilitate the Qualified Foreign Institutional Investor scheme.

China’s stocks traded near a 14-month low on Wednesday, as sentiment deteriorated after the latest economic data pointed to persistently weak domestic demand and a lingering downturn in housing prices. US Treasury yields rising to multi-decade highs also helped fuel the sell-off by squelching the multiples of Chinese technology stocks.

Wu highlighted the fresh risks from offshore leveraged products linked to underlying yuan stocks trading on mainland Chinese exchanges, indicating that the CSRC was more attentive to external shocks now and would strengthen cross-market oversight to mitigate the fallout of overseas turbulence.

He said the CSRC would also set up a new unit dedicated to monitoring the operation of the fund industry, broadening the scope for its risk management of investment tools. The unit would be responsible for registrations of private hedge funds, information collection and risk monitoring of mutual funds.

Those moves “would curb short-term volatility from external shocks and stabilise the risk appetite”, said Wei Chunze, an analyst at Shenwan Hongyuan. “Over the medium- and long-term horizon, it’s a continuation of pushing forward the comprehensive reform of the stock market by enlarging long-term capital and optimising the market-stabilising mechanism.”