Chinese state-owned firms announced plans to boost stock investments and buy back shares in a coordinated effort to stabilize markets hit by U.S. tariff tensions. The move follows a sharp 7% market drop on Monday, triggered by fears of a global recession and escalating trade war.
Major state investors like China Chengtong Holdings and China Reform Holdings (Guoxin) vowed to increase stakes in listed companies and ETFs. Guoxin will invest an initial 80 billion yuan ($10.95 billion), focusing on tech firms and state-owned enterprises. Meanwhile, China Electronics Technology Group pledged more buybacks in its listed subsidiaries.
Central Huijin, a key state fund, also reaffirmed plans to increase equity holdings, saying it has the liquidity and tools to curb market volatility.
The announcements sparked a market rebound on Tuesday. Analysts at CICC noted China's retail-heavy market is prone to sharp selloffs on negative news, and state action helps calm nerves and inject liquidity.
Several listed companies, including Sinopec, Orient Securities, and China Pacific Insurance, revealed share buyback plans to signal confidence and protect shareholder interests. Regulators have encouraged such moves, with China’s state asset watchdog calling on firms to support stability. The financial regulator also aims to raise investment limits for insurers to help stabilize the market.
The People's Bank of China voiced support for Huijin’s increased market activity, emphasizing the fund's role in maintaining market order.