China Boosts Market Defense With National Team Buying, Buybacks
China escalated its defense of the stock market, as state-backed funds answered the government’s rallying call by increasing purchases and more companies stepped up buyback plans.
A basket of nine exchange-traded funds that are favored by the so-called national team of investors drew 76.7 billion yuan of inflows on Tuesday, according to Bloomberg-compiled data. That was the second largest on record and most since April 8, 2025, when markets were then hammered by President Donald Trump’s tariff announcement.
The funds have been accelerating purchases since last month, but the spike in buying followed the government’s rollout of liquidity-injection measures this week aimed at reinvigorating the market. China’s tech-heavy Star 50 Index stabilized on Wednesday after tumbling nearly 4% in the previous session. The CSI 300 Index slipped 0.3%.
“The latest developments in the market point to Beijing’s growing recognition that more support is needed,” said Homin Lee, senior macro strategist at Lombard Odier in Singapore. “At the same time, the authorities seem to focus more on technical tweaks,” suggesting perception that the status quo is roughly manageable, he added.
Companies are also being enlisted in the effort to shore up confidence. CXMT Corp.’s chairman proposed Wednesday to increase the size of its share buyback to between 2.5 billion yuan to 5 billion yuan, saying the move was intended to protect investors’ interests and bolster confidence.
In a rare move in the market, Suzhou Dongshan Precision Manufacturing Co.’s controlling shareholders have proposed returning at least 1 billion yuan to investors in 2026 through cash dividends and share buybacks.
The buyback plans came after the People’s Bank of China said it would cut the rate on its relending facility to 1% from 1.25%, make the program permanent and encourage banks to increase lending. The facility provides low-cost central bank funding to banks for loans that finance companies’ share buybacks and stake increases by major shareholders.
Chinese banks have already submitted applications for more than 200 billion yuan of relending quotas, the PBOC said.
Meanwhile, several other mainland-listed companies — including Ningbo Joyson Electronic Corp., Universal Scientific Industrial Shanghai Co., and Hwatsing Technology Co. — disclosed new share buyback plans. Ningbo Joyson proposed buying back between 150 million yuan and 300 million yuan, according to its filing.
Investors remain unconvinced that buybacks alone will be enough to reverse the market’s downward trajectory, said Leonid Mironov, a portfolio manager at Gavekal Capital.
“Companies aren’t meant to be the core buyer for a prolonged period,” he said. “The idea is for them to step in on dips and selloffs, provide a floor and prevent corrections from escalating into bear markets. To bring retail investors back, you need to offer stability.”
With assistance from Chongjing Li and Lin Zhu.
©2026 Bloomberg L.P.
This article was generated from an automated news agency feed without modifications to text.
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