Stability cornerstone of market response

China's patchwork of financial supervision and regulations is consistent with a diffused framework in making decisions

Western criticism of the government's policy response to China's market turmoil appears to miss the point. Many expressed views that officials failed to fully understand how the markets operated or failed to develop policies sufficiently sophisticated to cope with the problems.

Let us look at the misconception that Chinese policymakers lacked market insight. Even casual observers of the country's economy would recognize the increased presence of foreign firms and private innovation, and the diminished role of the State.