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.