To advance its capital markets, China must establish a culture of compliance with market norms. This will take time, but there is reason for optimism. The China Securities Regulatory Commission has been building a young and well-educated staff of 250 people. It has had some high-profile enforcement successes in the last year and is beginning to show its mettle. The commission will soon take on another 1,000 people to staff nine regional offices.
Ongoing training is necessary to mould the staff into an effective, professional organization.
They will need to quickly assimilate new ideas in a changing market and, in the process, earn the market's respect. In turn, the markets will have to prove themselves. The Securities Law recognizes the need for self-regulation and establishes a statutory structure for a Securities Industry Association. Hopefully, it will play a role similar to that of the National Association of Securities Dealers in the United States, helping to establish and enforce industry skills and other professional standards. Many of the 70,000 or so certified public accountants are still attached to state-owned enterprises.