China needs to balance opening up its markets with preventing potential risks, and must curb massive foreign capital flows, according to the head of the nations securities regulator.

Large flows of hot money could endanger the healthy development of any market and must be strictly controlled, Yi Huiman of the China Securities Regulatory Commission said in a

speech at the China Development Forum Saturday. A copy of his remarks was posted on the CSRCs website.

Normal cross-border capital flows are encouraged, Yi said, adding foreign investors only accounted for less than 5% of Chinas entire stock market capitalization, below the ratio in developed markets.

China will also property handle matters related to overseas listings of Chinese companies, Yi said, adding the country had been seeking to enhance cooperation with related regulators in the U.S. but failed to get positive responses to multiple plans it proposed. The U.S. House of Representatives approved in December legislation that could ultimately lead to Chinese companies getting

kicked off U.S. exchanges if their financial audits remain off-limits to American inspectors.

With assistance by Charlie Zhu, and Amanda Wang

    Before it’s here, it’s on the Bloomberg Terminal.

    LEARN MORE