China’s top securities regulator has warned that global markets face a rising threat from both unpredictable “black swan” shocks and obvious but neglected “grey rhino” risks, calling for tighter regulatory cooperation to protect investor confidence.
Wu Qing, chairman of the China Securities Regulatory Commission (CSRC), told the 2026 China Capital Market Annual Conference in Shanghai that global capital markets were “experiencing a new round of asset repricing and rebalancing” amid “intertwined changes and turmoil.”
External uncertainty
According to a transcript published by the CSRC, Wu said the world was grappling with prolonged and recurrent geopolitical conflicts and growing uncertainty over the policy direction of major economies. Those external uncertainties required regulators to deepen cooperation, conduct joint research and strengthen the resilience of capital markets, he said.
Regulators should work together to prepare for major risk events, including black swans and grey rhinos, Wu added. Black swan events are rare, unforeseen shocks with severe consequences, while grey rhinos are obvious, high-impact threats that are often ignored until they strike.
Mainland markets under pressure
Wu’s remarks come as mainland Chinese equities struggle to recover despite a series of support measures from Beijing in recent months. Earlier in November, the CSRC, the People’s Bank of China and other financial regulators announced a one-year swap facility that lets institutional investors exchange illiquid assets for liquid ones from the central bank to support stock purchases.
Investor sentiment has nevertheless weakened after a brief rebound, according to a Morgan Stanley gauge tracking sentiment in China’s stock market.
A unique investor base
Wu noted that China now has more than 200 million stock investors and 800 million fund investors, a scale he described as a "unique condition" globally that warranted deeper study of the market's structural challenges.
AI on the regulatory radar
Artificial intelligence was another area regulators should monitor closely, Wu said. He described the technology as "disruptive" and called for more research into risks such as AI-enabled cyberattacks.
Former People's Bank of China governor Zhou Xiaochuan, speaking at the same conference, also highlighted AI's risks and opportunities. He said advances in computing power and communications could drive up trading frequencies and amplify market volatility.
