China Calls for Healthy Stock Market


China's State Council, or cabinet, has called on financial regulators to promote stable and healthy development of the country's stock market, state-run media reported on Wednesday.

In a set of working priorities for 2008 for government agencies, laid out at the start of the year but restated on Tuesday, China also said it had to guard against both economic overheating and a slowdown, so as to prevent big swings in the country's macro performance.

The council called on the central bank, financial watchdogs and other bodies responsible for improving the capital markets to work on raising the quality of listed companies while maintaining an open, fair and just market order.

The Shanghai Composite Index tumbled 34 percent in the first quarter, its biggest quarterly drop since 1992, and fell a further 4 percent on the first day of the new quarter on Tuesday.

The slump in share prices has spurred calls for government action to bolster the market, which has been hurt by signs of global economic weakness and a flood of new shares from domestic initial public offerings and corporate fundraising.

Premier Wen Jiabao said over the weekend that the government would promote stable and healthy development of the stock market, although investors and analysts have said specific measures are needed.