Regulator faces reform challenge

The current stock market volatility will challenge the Chinese regulator's ability to respond and implement reform, analysts said after the country's securities chief acknowledged deep flaws in the system.

Xiao Gang, chairman of the China Securities Regulatory Commission, delivered a lengthy speech at the CSRC's annual work meeting on Saturday in which he said the market rout since the summer had exposed many loopholes and deficiencies.

The "abnormal" volatility reflected the immaturity of the Chinese market and its investors, incomplete trading rules and an incompetent regulatory system, he said.