The China Securities Regulatory Commission announced last Sunday that it is drafting a plan to introduce a circuit breaker into China's stock market in order to deepen reforms, improve the legal framework and enhance market supervision after the turmoil in recent months.

The Shanghai Composite Index has dropped by about 40 percent since July, which has exposed many problems, including insufficient regulation and supervision of the market as well as excessive short-term speculation. China should learn from developed economies to improve the top-level design for its stock market, the CSRC told the media.

The plan for a circuit breaker to reduce extreme market volatility is soliciting public opinions now. Under the plan, China's stock exchanges would temporarily halt trading to avert panic selling if the Shanghai Composite 300 Index fluctuates by 5 percent, according to the draft plan released by the Shanghai Stock Exchange, Shenzhen Stock Exchange and the China Financial Futures Exchange.

The Shanghai Composite 300 Index, which opened on April 8, 2005, has fallen by more than 7 percent five times in 2015.