“I heard you paint houses.”

I was only half joking yesterday when I suggested Xi Jinping’s first question for regulators in a briefing on the never-ending bear market in Chinese equities would be, “Have you tried threats?”

Media reports indicated that the scope and severity of the stock meltdown prompted officials to set up a meeting with the top leadership in Beijing, including the big man himself. Markets were hoping for concrete measures to stanch the bleeding. Instead, they got a new securities regulator with a grim moniker: Wu Qing, better known in the industry as “The Broker Butcher.”

Wu, seen below lovin’ life at a press conference in Beijing in 2021, boasts an impressive Party resume which includes stints in various high-level municipal roles in Shanghai, including vice mayor. He was also head of the Shanghai Stock Exchange, and earned his ferocious nickname while presiding over a crackdown that shuttered 31 securities firms for various sorts of ostensible illegality.

The move isn’t surprising. A year ago (nearly to the day), sources told the Western financial media that Wu, who has a PhD in economics, was likely to replace Yi Huiman at the helm of the CSRC, where Wu’s implacable reputation precedes him and is a natural fit for Xi’s approach to managing China’s internal affairs.

Wu’s deep experience in Shanghai politics overlapped the career arc of Li Qiang, the Party boss who oversaw Xi’s infamous Shanghai lockdown before replacing the late Li Keqiang as premier. Wu scored alternate member status on the Central Committee during the 20th Party congress in 2022, when Xi consolidated power and demoted moderates.

Plainly, the timing isn’t a coincidence. The point of putting Wu in charge is to send a message about the Party’s commitment to stabilizing markets — through coercion, if necessary. That said, it’s worth noting that these kinds of appointments are generally made in close proximity to an annual policy gathering held in March.

As ever, China needs structural reform, not more arm-twisting. I doubt seriously that installing an uncompromising enforcer at the top of the CSRC will itself be enough to halt the rout in Chinese equities. For markets, the problem certainly isn’t the credibility of the Party’s determination to deal harshly with illegality. No one doubts that running afoul of Xi can be a death sentence — figuratively or literally. Wu’s appointment hasn’t somehow enhanced that threat.

What it might do, though, is have a chilling effect on legal, legitimate activities (like, say, selling stocks) that work at cross purposes with the effort to put a floor under equities. It could even prompt buying from some market participants on the view that recently-initiated long positions are insurance against The Butcher.

In an accidentally macabre description conveyed to Bloomberg early last year, a person described as “familiar” with Wu said The Butcher “sometimes jokes he is more fit to be a surgeon.”