DgcityChina’s state-backed investment funds poured a record amount of money into the country’s stock market last week, buying at least 156 billion yuan, about $23 billion, of exchange-traded funds in the clearest sign yet that authorities want a floor under a bruising months-long selloff.
The buying, through nine large equity funds long associated with the so-called national team, surpassed the previous weekly record of nearly 140 billion yuan set during the April 2025 trade-war selloff and eclipsed the 128 billion yuan deployed in late October, when a sharp downward spiral forced a more urgent intervention.
The scale of official support reflects a painful stretch for Chinese equities. The CSI 300 index of large mainland companies fell 8.5 percent in October, its worst month in more than a decade, while the STAR 50 technology index has dropped roughly 40 percent from its peak in the middle of the year. Foreign investors have been net sellers for much of the autumn, and household enthusiasm for stocks has cooled sharply.
Beijing has attacked the slide from both sides. The central bank made cheap loans for share buybacks a permanent feature, cutting the rate on its buyback relending facility and offering banks full funding on one-year renewable terms. The securities regulator, meanwhile, has quietly pressed banks to slow the pace of new share listings, reducing the supply of stock hitting the market at a moment demand is weak. Neither measure was framed publicly as a rescue.
Analysts say the combined package is designed to stabilize prices rather than ignite a fresh bull run. The approach mirrors earlier episodes in which state funds accumulated blue-chip ETFs during periods of stress and then slowed purchases once orderly trading returned. Economists at several independent research houses have cautioned that policymakers appear skeptical of engineering a broad, debt-fueled equity rebound, given how previous rallies ended.
Still, the intervention appeared to steady sentiment. The Shanghai Composite ended the week with a gain of 1.4 percent and the Shenzhen Component rose 3.2 percent, snapping six straight weeks of losses, with chip and optical-component makers leading the rebound. Traders cautioned that the market’s durability will depend on whether the state funds keep buying into year-end and whether corporate earnings, particularly in the technology sector, begin to catch up with valuations built on AI optimism.
