BEIJING (Reuters) — The sharp drop in Chinese stock markets in the past week is a normal correction that wasn’t driven by fundamental economic concerns, the head of Shanghai Stock Exchange said on Saturday.The Shanghai market dropped nearly 9 percent on Tuesday, triggering a global sell-off in equities, commodities and oil on fears that a dented share market could slow China’s economy.

“I think the sharp drop was a normal correction by the stock market,” said Zhu Congjiu, general manager of the exchange.

“Every year, every day the market goes up and down. I don’t think that it was a question of fundamentals,” Zhu told reporters on the sidelines of the Chinese People’s Political Consultative Conference (CPPCC), a largely symbolic council of business and civic advisers that meets once a year.

In the past, foreign exchange and capital controls have largely insulated the Chinese market from movements in global equities.

“The sell-off (in other markets) was mostly related to their own economies, but the growing integration of the Chinese economy with the global economy means that in future there will be more incidents where Chinese and international stock markets will impact each other,” Zhu said.

“The domestic market has had a relatively short development and is still a bit fragile,” he acknowledged.

Zhu’s remarks were in line with comments by other officials. “It is totally natural for there to be ups and downs in the process of economic development, and especially in the stock market,” deputy central bank governor Wu Xiaoling said on Saturday.

The Shanghai Stock Exchange is the larger of mainland China’s two exchanges, with market capitalisation of 8.9 trillion yuan ($1.149 trillion).

China’s two exchanges also trade hard currency-denominated B-shares, which have waned in importance as Chinese firms list in Hong Kong and overseas. China has also introduced the Qualified Foreign Institutional Investor (QFII) quotas for foreigners to invest directly in Chinese yuan-denominated A-shares, which are otherwise closed to them.

Zhu said he wasn’t aware of any plans to merge the A- and B-share markets.

Shanghai A-shares often trade at higher price-earnings multiples than do the same companies’ Hong Kong-listed H-shares. Zhu said resolving that price gap would be complicated, since it is linked to China’s foreign exchange controls and other factors.

China’s stock markets will become more important to the economy as its financial structures change, Zhu said. Firms will rely on equity markets more to raise capital, weaning themselves away from their current dependence on bank loans.

China’s corporate bond market is still in its early stages, and turnover is stunted by Beijing’s tight control over the annual volume of new issues.

“The corporate bonds market was identified as a priority in the financial working committee earlier this year. But developing it is a systematic task that has to cover issuing, the credit ratings system, and trading,” Zhu said.

The exchange is preparing by developing trading products and systems, and improving back-office clearing and settlement, he said.

China is also planning to launch stock index futures, although Zhu said the China Securities Regulatory Commission would have to wait until conditions were ripe.