Should the government have intervened when the index reaches 3,000 or 5,000? No one can provide a tenable answer.

Some policymakers use the stock exchanges as a tool to measure State-owned enterprises' access to easy financing and, therefore, have often intervened in the stock market with a view to "promoting its healthy development". Is it "healthy" enough now? Probably not. Some listed companies still employ unfair means to make profits, insider trading is believed to be still rampant, and it is still very difficult for retail investors to protect their interests if they fall victim to deceitful companies.

The way to manage the market, therefore, must be changed. Well-meaning it may be, but government intervention often cannot stop the index from rising, as was proved by the "midnight cock-crowing" incident in late May 2007, when a sudden increase in stamp duty triggered a weeklong selling spree. Defying the will of policymakers, however, the Shanghai index continued to soar for four months to peak at 6,124 in October 2007.

What the regulators should really concentrate on is making information disclosure more transparent, eliminating cheating and manipulation, educating investors and improving the legal framework to protect small investors' interests. Only when the market is free of cheating and manipulation can the interests of investors be better protected.

The government has been doing all that, but probably not doing enough. For example, the Securities Law, being revised now, will not allow class action in lawsuits involving small investors and dishonest listed companies, according to experts participating in the revision process. Class action means if one small investor sues a listed company and wins the case, all the other investors who have fallen victim to the wrongful activity of the company can make similar claims. This will not only protect retail investors' interests, but also frighten potential wrongdoers into checking themselves.

When the market order is properly regulated, regulators will not have to worry about the rise or fall of the stock index.

The author is a senior writer with China Daily.