China's securities regulator said over the weekend that it would suspend restricted stock lending altogether, the government's latest attempt to stabilize the domestic stock market after recent plunges. Last week, domestic Chinese stocks suffered their worst performance in five years, but recovered temporarily thanks to supportive government policies, particularly the massive reduction in bank deposit reserve ratios. However, last Friday it fell again, showing deep pessimism among market participants about economic uncertainty. Analysts and investors say the Chinese government must roll out more support measures to restore consumer and business confidence and put the economy on a stronger footing. During prolonged downturns, long-term loans are limited stock offered to company employees or investors for trading purposes, such as short-selling, that can put pressure on the market, but can be loaned out to others. Sunday's action said China's Securities Regulatory Commission would "emphasize fairness and rationality, reduce the efficiency of stock lending, and limit the benefits of institutions using information and tools to give all types of investors more time to digest market information." and create a fairer market order,” she said in a statement released on her official WeChat account. In addition, the regulator emphasized that with this measure, "we will resolutely suppress illegal activities that are exploited to reduce holdings and cash out through securities lending." Chinese stock markets plummeted in 2023 and continued to decline in the new year. The CSI300 index rose some, but fell about 3% this year. Small Chinese investors are fleeing the stock market in greater effort than foreigners to avoid uncertainty about the domestic economy, sending premiums for international index funds soaring. China's economy grew by 5.2% in 2023, slightly above the government's target, but this was affected by the weak, log-down period compared to 2022 and the recovery was very erratic. Data from last December showed sluggish consumption and the highest decline in house prices in nine years, putting the property market in deep crisis. The Shanghai and Sanjian stock exchanges said they would stop lending securities during the lock-up period for strategic investors from January 29.