Chinese authorities are taking significant measures to stabilize the slumping stock market by considering a package that includes mobilizing about 2 trillion yuan ($278 billion) from the offshore accounts of Chinese state-owned enterprises. This fund would mainly be used to buy shares onshore through the Hong Kong exchange link. Additionally, at least 300 billion yuan of local funds have been earmarked to invest in onshore shares through China Securities Finance Corp. or Central Huijin Investment Ltd.
The move comes after previous attempts to restore investor confidence fell short, prompting Premier Li Qiang to call for “forceful” steps. Policymakers are reportedly seeking to prevent further slumps in the stock market and bolster investor confidence with these proposed measures. These efforts show a concerted effort by Chinese authorities to stabilize the stock market in the face of market volatility and economic uncertainty.
The impact of these measures on the stock market remains to be seen, but Chinese authorities are taking significant steps to stabilize the slumping market in an effort to restore investor confidence and prevent further declines in the market. The proposed package of measures, including the mobilization of significant funds, reflects a determination by policymakers to address the challenges facing the stock market and demonstrate stability in the face of economic uncertainty.