China's efforts to stabilize stock market pay off

China's efforts to stabilize its stock market have been working and the recent volatility of the market is unlikely to have much bearing on the world's second- largest economy, experts here have said.

Yip Sau Leung, associate professor in economics of Nanyang Technological University, said the actions taken by the Chinese authorities in the wake of the recent market volatility have achieved desired results.

He said that if the authorities didn't give a hand while facing the serious volatility, systematic risks might occur; he suggested China further improve relevant legislation so as to stop such behaviour as malicious sell-offs in the future.

George Yeo, former Singapore minister of foreign affairs and now chairman of Hong Kong-listed Kerry Logistics Network, said Chinese government has rolled out a slew of measures targeting the stock market, and this is a step the government needs to take.

He noted that China is finding its own way into the future and the liberalisation of its financial system will not be the same as Singapore and Europe.

Chen Gang, research fellow at the East Asian Institute (EAI), National University of Singapore, said the market volatility may pose negative effects on retail investors, but as long as the stock market stabilizes, it won't affect the economy much.

The latest official figure shows China's economic growth rose 7 percent year on year in the second quarter, and the value-added output of the service sector continued to grow.

"The figure shows that China's economic transition is quite successful, with preliminary effects already showing up," Chen said. "Basically the overall macro-economy is quite stable, and the stabilisation of the financial market is also an important key to achieve a good economic goal in the second half."

Global rating agency Fitch also gives support to the Chinese economy, saying that "theGDP number was in line with the agency' s forecast which did not factor in any boost from high equity valuations," and the recent volatility in China's market does not pose a systemic risk to the nation's real economy or financial system, with Chinese banks having relatively little direct exposure to stocks.