China’s national team may need to accelerate stock purchases after the benchmark notched a record losing streak, though state-backed buying alone may not be enough to put the market on a sustained recovery, according to Bloomberg Intelligence.
Central Huijin Investment Co., the state-backed investor that leads China’s market stabilization efforts, raised $231 billion through ETF sales in the first half but has redeployed just $43 billion since purchases resumed in July, BI analysts including Rebecca Sin wrote in a note. That leaves about $188 billion in dry powder, enough for 75 sessions of buying at the recent pace.
“With no global equities rebound to rely on, the national team might need to buy more and do so for longer than in its two most recent rescues, during the April 2025 tariff shock and the July 2026 technology selloff,” according to the analysts. “Capacity isn’t the constraint; willingness to deploy money is. So far this month, the pace of buying suggests the national team is cautious,” they added.
According to BI estimates, state-backed funds spend about $15 billion between Oct. 9 through Oct. 20. That pace was slower than the July 2026 rescue.
Signs of national-team buying have picked up this month as the CSI 300 Index nears a technical bear market following 10 weeks of selling. The recent selling has been disproportionately centered on tech, with the Star50 Index down nearly 40% from its peak amid the global AI rout, making it one of the region’s worst performers.
The composition of state-backed buying has shifted toward technology and growth shares, BI notes. In October so far, the CSI 300’s estimated share of purchases has been about 45% so far, down from 55% historically. Meanwhile, the combined share of the tech-heavy Star50 and ChiNext gauges rose to about 32% from 11% historically. That dovetails with Beijing’s push to develop homegrown technology and preserve the stock market as a source of capital.
The challenge goes beyond where the money is being deployed. BI says that a panic-driven selloff can potentially be stemmed once selling is exhausted, while a steady decline fueled by weak domestic investor sentiment is harder to reverse. That would mean “more capital and policy support than market rescues” of the past.
A similar challenge emerged in 2024, when sustained ETF buying cushioned stocks through the summer, but failed to deliver a lasting turnaround until broader policy measures lifted sentiment in September.
Still, the national team’s return is more about slowing the selloff than engineering a turnaround, with direction ultimately determined by fundamentals, according to Zhu Zhenxin, head of Asymptote Investment Research in Beijing.
“If the market falls too quickly, the national team will probably continue buying, though the intervention may not be enough to reverse the market,” he said. “If the decline slows or the market moves sideways, the buying will probably stop.”
With assistance from Jack Wang.
This article was generated from an automated news agency feed without modifications to text.
