In response to a sharp drop in local stock prices, the sovereign wealth fund in China is entering on Monday, which increased stock holdings to support the market.
Central Huijin Investment, a unit of China Investment Corp owned by the Chinese State Council, has announced that it has bought shares listed in China through the boxes on the stock exchange (ETFS) and will continue to do so to maintain the stability of the market.
The intervention follows a 7 % decrease in the Shanghai Boat Index, a sharp decrease in five years, after the United States imposed an additional tariff on Chinese imports. In revenge, China imposed its definitions, escalating tensions and raising fears of a long trade war and global economic slowdown.
However, the Huijin statement helped stabilize the market, which recovered from the previous losses of up to 9 %. Despite the recent fluctuations, Chinese stocks have lost 7.6 % since the tariff for US President Donald Trump, a less severe decrease compared to a 13 % decrease in the Nikki index in Japan.
Huijin expressed his confidence in the capital market in China, saying that he is “severely optimistic about the capital market prospects in China and fully recognizes the current investment value of shares.”
Wen Hao, an executive of Yingzhiliang Hangzhou technology, suggested that the market may limit the negative side due to support from state -backed funds and possible governmental measures such as cash dilution and consumer motivation. However, William Shen, Chairman of Spring Mountain Pu Jiang Investment Management, warned that these efforts may not be sufficient to counter the broader economic impact of the trade war. He advised caution, saying that “searching for deals is now similar to hunting a falling knife.”
Central Huijin is part of the “national team” in China for state -backed investors, including China Securities Finance Corp, who is charged with commissioning the market during uncertainty periods. In the past, Huijin intervened to buy shares through investment funds traded during market accidents, and their value in ETF was 1 trillion yuan ($ 137 billion) at the end of 2024, according to the leading securities.
On Monday, Huijin trading volumes, such as Harvest CSI 300 ETF and Chinaamc CSI 300 ETF, rose to the highest level per year.
