Stock market intervention by Beijing 'could help narrow income gap': Communist Party newspaper

Beijing's intervention to calm the shaky stock market was necessary and could help narrow the income gap, a commentary in a Communist Party newspaper said on Sunday.

The article, published in , run by the party's propaganda department, said the intervention, combined with other government measures, was "necessary" to keep household income levels buoyant.

"The intervention can prevent a financial crisis as a result of mounting vulnerabilities in the market and prevent people from losing confidence in financial authorities," it said.

The stock rout, which began in mid-June, prompted Beijing to launch a slew of measures to restore sentiment, including asking companies to buy their own shares, encouraging executives to do the same and suspending initial public offerings.

Some global fund managers said Beijing's measures to shore up the markets would put off foreign investors as the intervention underscored the lack of maturity and liquidity in the mainland capital market.

But the article in said the steps taken to address the rout were "appropriate" and could help to narrow income disparity.

It said the stimulus package launched by Beijing after the global financial crisis in 2008 to boost household income and private consumption had also had this effect - as had its subsidies to low-income groups and public pensions.