"We are committed to being a pro-active regulator in fostering corporate governance, in enforcing our rules, in safeguarding the integrity of our markets, and in championing the rights of our investors," said Laura Cha, vice-chairman of China Securities Regulatory Commission (CSRC), the market watchdog.

Over the past several years, numerous measures have been taken to improve the corporate governance standards of listed companies, including independent directors, comprehensive information disclosure requirement and joint inspection of all listed companies by CSRC and the State Economic and Trade Commission.

Legal and accounting reform is under way, and includes strengthened enforcement measures.

"We have put in place a regulatory framework which takes into consideration features and problems unique to our market and our economy," Cha said.

A great deal remains to be done, however, as China's stock market is still stained by scandals and irregularities.

"Indeed, we would readily admit that ours is an emerging market and that we have our share of the weaknesses of an emerging market," Cha said.

But she highlighted the fact that given the relatively short history of the market and regulator, China's capital market "has actually done remarkably well."

Cha pointed out that it is not enough to have a plethora of rules and regulations. Consistent, fair and transparent enforcement also counts.

Improving the credibility and standard of intermediaries and professionals, as well as investor education are of the utmost importance to the capital market, she added.

(China Daily January 22, 2003)