China replaces head of securities regulator amid market turmoil

BEIJING (Reuters) -- China has replaced the head of its securities regulator, the official Xinhua news agency said on Wednesday, as policymakers struggle to stabilize the country's main stock indexes after a plunge to five-year lows.

The cabinet removed Yi Huiman as chairman of the China Securities Regulatory Commission (CSRC), replacing him with Wu Qing, a veteran securities regulator who had led the Shanghai Stock Exchange and served as a key deputy in Shanghai's municipal government, Xinhua said.

Yi's removal comes as Chinese markets are on a knife-edge as institutional and retail investors scramble to cut their losses, with the sputtering economy and a lack of forceful government stimulus measures weighing heavily on confidence.

Numerous market-focused support moves such as restrictions on short-selling or reductions in trading duties have failed to staunch the selloff, as have a number of government statements promising support but lacking details.

"As a knee-jerk reaction, I can see how this would be viewed as positive. But in addressing the well understood issues of the Chinese economy, it doesn't address anything at all," said Tim Graf, the head of EMEA macro strategy at State Street.

The FTSE China A50 Index Futures edged up after the announcement, with a gain of 0.2%. Hong Kong's Hang Seng futures were little changed on Wednesday evening.

Foreign investors sold a net 18.2 billion yuan ($2.5 billion) in Chinese equities last month to notch a sixth straight month of outflows, and the central bank has been persistently supporting the yuan currency.

World stocks went up 20% last year, gold rose 13% and bitcoin 155%. China's blue-chip CSI300 fell 11% and collapsed to a five-year low in recent sessions.

Fresh vows of support