FirstFT: China replaces head of market regulator as it battles sell-off

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Good morning. Beijing has removed the powerful Communist party boss and chair of its securities regulator as authorities battle plunging confidence in Chinese stock markets.

The Communist party’s central committee replaced Yi Huiman with Wu Qing, a senior official who made a name for himself cracking down on brokerages, as China Securities Regulatory Commission chair and party secretary, state news agency Xinhua reported yesterday.

The terse report did not provide any explanation for the decision to remove Yi, which comes amid a crisis in China’s property sector that has hit equity valuations and led institutional investors to divest their holdings.

“He’s clearly gone down because of the market slump,” said Chris Beddor, deputy director of China research at Gavekal. “Part of his de facto job as securities regulator was to prevent exactly this from happening: a politically embarrassing market decline.”

One banker who has met Yi said he was taking the fall for recent losses in the market. “At this point, someone needs to be made the scapegoat,” the banker said. Here’s more on Yi’s removal — and why being a securities regulator in China is a “thankless task”.

• Economic data: China reports January inflation rate data, while December trade balance figures are due from Japan.

• India monetary policy: The central bank makes its interest rate announcement.

• Pakistan general election: Pakistan’s leading political dynasties are poised to retake control of the government in today’s election after authorities crushed the party of jailed ex-prime minister Imran Khan.

• US: The Supreme Court is scheduled to hear oral arguments on whether former president Donald Trump can be booted from the primary ballot in the state of Colorado.

• Companies: AstraZeneca, Honda, Nissan, ConocoPhillips, Kering, Siemens and SoftBank are among those reporting results.

Five more top stories

1. Israeli Prime Minister Benjamin Netanyahu has rejected as “delusional” Hamas’s conditions for a deal to release the hostages it holds in Gaza. Hamas had demanded a ceasefire lasting four-and-a-half months, an Israeli military withdrawal from Gaza, and the release of at least 1,500 Palestinian prisoners. Netanyahu, who met US secretary of state Antony Blinken yesterday, said accepting the terms would lead to “another massacre”.

2. Alibaba has put the planned listing of its $20bn logistics arm Cainiao on hold, blaming market conditions. The Chinese tech giant also reported a rise in quarterly sales of 5 per cent year on year to Rmb260bn ($37bn), just short of Wall Street analysts’ expected Rmb262bn. Here’s what else Alibaba chair Joe Tsai said during yesterday’s earnings call.

• More IPO news: Online fast-fashion giant Shein, which has gone to great lengths to separate itself from its Chinese roots, has now found itself having to return to Beijing to seek authorities’ tacit approval for an imminent listing in New York.

3. Senate Republicans voted down a bill to provide new funding for Ukraine yesterday, leaving Democrats racing to pass a new measure in the chamber, as the White House warned that there was “no alternative” to US backing for Kyiv’s war effort. Follow the frenzy of political manoeuvring on Capitol Hill here.

4. Mitsubishi’s shares surged to a record high yesterday after the Warren Buffett-backed trading house announced a “monster buyback” of $3.4bn. Jefferies analyst Thanh Ha Pham said “market participants were not expecting” the buyback, adding Mitsubishi had “another ¥500bn excess cash that it could return to shareholders”. Here’s more on the Japanese company’s share price rally.

5. The heads of consulting giants McKinsey and BCG told US lawmakers that their employees in Saudi Arabia could face jail if the firms handed over details of their work for the country’s sovereign wealth fund without approval from the kingdom. A Senate committee is investigating how Saudi Arabia is using “soft power” to extend its influence in the US, and lawmakers assailed the consulting groups for their work in the kingdom at a hearing on Tuesday.

Visual investigation

For two months in the spring of 2022, Mariupol was the scene of fierce fighting between Russia’s invading army and Ukraine. When Vladimir Putin’s forces finally captured the city, almost half of it had been destroyed. Moscow wants to show it is rebuilding and Russifying the city, but an FT visual investigation shows the reality is very different from the propaganda.

We’re also reading . . . 

• Messi apologises: Lionel Messi has taken to social media to apologise to “mainland Chinese and Hong Kong football fans” after sitting out a much-anticipated friendly fixture in Hong Kong.

• Who invented butter chicken?: Two rival restaurants are battling over the origins of this dish in a Delhi High Court case that has divided India’s culinary scene.

• ‘Meme-lord’ unveiled: The 32-year-old banker behind Litquidity, a satirical alter ego that has gained a cult-like following on Instagram, reveals his identity to the FT.

Chart of the day

The number of industrial disputes in Australia has jumped since the Labor government took office in 2022, as unions make up for “lost time” during the preceding nine-year period of Conservative rule.

Take a break from the news

Many misconceptions about a commercial pilot’s job relate to the fact that there are two seated at the controls. Who’s doing what — and when and why? The answers are a function of both rank and role, writes FT pilot-columnist Mark Vanhoenacker.

Additional reporting by Tee Zhuo and Gordon Smith