The circuit breaker mechanism was triggered twice in three trading days and this is rare even globally.

ANBOUND's research team is of the view that the insufficient communication between the policy-making departments and the market is a common mistake made by the decision makers in China.

China Securities Regulatory Commission are now in a very difficult position, on the one hand, if the circuit breaker mechanism continues, it is certain that there will be frequent activation of the circuit breaker, on the other hand, if they were to discontinue with the implementation of the circuit breaker mechanism, there are concerns that they might be criticized for chop and change.

The relevant departments should consider suspending the circuit breaker mechanism and invite market participants to open discussions and thereafter, make the necessary amendments to the policy.