Long-term reform move, not quick fix

Global investors still in a shock over the about 40 percent drop in the Chinese stock market since mid-June may not understand the government's latest move, because it may not be enough to arrest the slide in share prices.

On Monday, the China Securities Regulatory Commission, Ministry of Finance, State-owned Assets Supervision and Administration Commission of the State Council and China Banking Regulatory Commission jointly issued a notice encouraging mergers, cash bonuses and share repurchase by listed companies.

Unlike previous government efforts such as interest rate cuts, cracking down on fabricated trading information and alleged malicious short selling, this move is not ostensibly aimed at restoring value to the stock market any time soon. But in terms of expediting the reform of State-owned Enterprises and promoting healthy development of the stock market, the move to increase cash dividends for Chinese shares was long overdue.