China Deploys State Funds to Stabilize Equity Market
Chinese financial regulators ordered state-linked funds and insurers to increase stock purchases and buybacks to counter a significant decline in equity markets.
The Government of China implemented a series of emergency measures on October 15 to stabilize the equity market following a period of significant decline. The benchmark index recently hit its lowest level since August 2025, driven by domestic economic headwinds and a global rout in technology shares.
Regulatory interventions include urging companies and state funds to increase share buybacks and directing the national team of state-linked funds to accelerate stock purchases. Authorities also issued window guidance to major insurers, instructing them to report their equity holdings and refrain from locking in losses on underwater positions.
Market response was immediate but volatile. A CSI 300 tracking ETF saw a record daily inflow of 18.8 billion yuan on Thursday, although stocks surrendered some of those early gains by Friday.
