Suspending the Circuit Breaker: Does It Mean an Even Bigger Disaster?

Suspending the Circuit Breaker: Does It Mean an Even Bigger Disaster?

After the circuit breaker mechanism was introduced, the first trading week of 2016 left the global financial market stunned: China’s A-share market triggered circuit breakers twice in four trading days, to the point that the entire market could barely function normally. To prevent securities industry employees from effectively getting off work at 10:30 in the morning ever again, the China Securities Regulatory Commission hurriedly issued a notice suspending the circuit breaker mechanism. As soon as the policy was announced, the market immediately turned positive in celebration. Judging from this, unless some effective rescue measures are found, this bureaucratically engineered oddity known as the “circuit breaker mechanism” may not be far from an early death.

That said, the CSRC itself is probably feeling aggrieved as well. After all, the so-called “circuit breaker mechanism” was not our own invention. Looking around the world, the United States, Japan, Singapore, and many other capitalist countries implemented it long ago. And these “other people’s children” have all grown up strong and healthy, so why does borrowing the idea suddenly not work here? Is there something wrong with the system itself, or has it simply become sick after failing to adapt to local conditions in China?

As someone working in the electrical testing industry, I normally have almost nothing to do with mechanisms in the securities market. But since the CSRC borrowed the term “circuit breaker” from our electrical profession, let me start from that very term and use an electrical engineer’s perspective to analyze where the problems with this so-called “circuit breaker mechanism” may lie.

In earlier years, “fuses” were closely tied to everyday life. Back then, there was no such thing as a miniature circuit breaker in common household use. The incoming electricity supply for every home relied on a knife switch with a ceramic insulating shell. If someone used a high-power appliance like an electric stove and the power suddenly went out, the first reaction was to check the neighbors. If their electricity was still working, then you would pull down the switch, remove the small box underneath, and check whether the fuse wire had blown. If it had, you replaced it—and you definitely would not dare keep using the stove.

That fuse wire is formally called a “fuse.” When people said the fuse had blown, it was because it had its own built-in “circuit breaking mechanism.” Once the power consumption exceeded a certain limit and the current became too large, the fuse would sacrifice itself for the greater good in order to ensure electrical safety. By melting itself, it protected the safety of the power supply system. The “circuit breaker mechanism” introduced into the A-share market follows essentially the same logic.

A fuse’s breaking behavior consists of two parts: instantaneous characteristics and inverse-time characteristics. If, by accident, the live wire and neutral wire are connected together at home and cause a short circuit, the fuse blows instantly. That is roughly equivalent to the A-share market tripping the circuit breaker within just a dozen minutes. The other case is the inverse-time characteristic. For example, if you use an electric stove and the power exceeds the permitted limit, the fuse will trip according to the actual load: the greater the overload, the faster it blows; if the overload is smaller, it takes longer. That is what is known as the inverse-time characteristic.

In principle, a fuse is a classic case of sacrificing the lesser to protect the greater. It blows, and power is interrupted, but in doing so it prevents a fire or an even bigger hazard. From the perspective of safety, it is a reliable approach. In my view, the decision to introduce such a system into the A-share market was motivated by exactly the same safety logic: pause trading temporarily in order to prevent a market crash.

But once the “circuit breaker mechanism” is introduced, if your home loses power every few days, then yes, it may be safe—but normal life becomes impossible. So what should you do? As I recall, some neighbors long ago came up with their own “suspension of the circuit breaker mechanism”: they simply replaced the fuse wire with a copper wire. That way, it would never blow again, and they could go back to watching TV as usual.

But anyone with even a little common sense can see that this only creates an even bigger hidden danger. Best case, it causes a fire; worst case, it drags the neighbors into a blackout too. It is simply not worth it.

So if installing the circuit breaker means it keeps tripping, while suspending it creates hidden dangers, where exactly is the real problem? Why is the neighbor’s house doing just fine? In electrical terms, there are only a few likely explanations: either your household is illegally using high-power appliances, or there is something wrong with your wiring and a short circuit exists somewhere. If your house keeps blowing fuses, then to solve the problem thoroughly, the first thing you need to do is inspect the wiring and the electrical appliances in use, and fix the systemic problems within your own setup. That is the correct approach. Hastily reconnecting everything with a copper wire—what kind of “suspension of the circuit breaker mechanism” is that supposed to be?

Switching devices are a means of ensuring electrical safety. If there is nothing wrong with the fuse itself, then the problem must lie in the electrical system. To ensure safety, you have to start with the system, rather than assuming that merely introducing a circuit breaker—or suspending one—will solve anything.

As for how to begin at the system level and ensure the safety of the system as a whole, I am no expert in the A-share market or the securities industry. That question still has to be answered by the so-called experts, scholars, and the leaders of the CSRC. But when it comes to electrical systems, that responsibility is ours. For many years, Visi Automation has been committed to electrical testing, inspection, and test equipment, providing component-level, product-level, and system-level testing equipment, as well as complete laboratory solutions. We support every stage of electrical product development, manufacturing, and application. Ensuring the safety of electrical equipment and power systems through advanced testing and inspection methods is Visi Automation’s constant pursuit.