The actions taken by China’s state-owned investment firms and state-owned enterprises (SOEs) reflect a clear determination to stabilize the country’s capital market and support domestic stocks amid the economic shockwaves triggered by the latest tariff policy from the Trump Administration, a Chinese analyst said on Tuesday.
Chinese state-owned capital operation firms moved quickly to increase their holdings of domestic equities, voicing strong confidence in the long-term outlook of the country's capital market.
Central Huijin Investment Ltd. (Central Huijin), a Chinese state-owned investment company, said in a statement on Monday that it had increased its holdings of exchange-traded funds (ETFs), saying it will continue to do so in the future in order to "resolutely safeguard" the stable operation of the capital market.
Meanwhile, multiple Chinese central SOEs have rolled out share purchase initiatives, underscoring their robust confidence in the long-term prospects of the country's economy and capital market.
China National Petroleum Corporation on Tuesday disclosed that it will buy A-shares and H-shares over the next 12 months, with a total investment of up to 5.6 billion yuan (about 777.37 million U.S. dollars), while China Petroleum and Chemical Corporation announced a similar 12-month purchase plan worth up to 3 billion yuan targeting shares listed in Shanghai and Hong Kong.
In the private sector, battery giant CATL plans to buy back 4 to 8 billion yuan (about 550 million to 1.1 billion U.S. dollars) worth of shares in the domestic market. The buyback trend spans multiple sectors, featuring prominent names like display maker BOE, appliance leader Haier, and premium liquor producer Kweichow Moutai.
following a raft of measures to stabilize the capital market, the Chinese stock market closed higher on Tuesday, rebounding from steep losses on the previous trading day.
On Tuesday, the benchmark Shanghai Composite Index rose 1.58 percent and the Shenzhen Component Index went up 0.64 percent. The ChiNext Index, tracking China's Nasdaq-style board of growth enterprises, rose 1.83 percent.
Qu Qiang, a research fellow at the Belt and Road Research Center of Minzu University of China, said in an interview with China Global Television Network (CGTN) that the stabilization efforts have led to positive results judging from the stock market behavior.
"I think this message has been loud and clear. I think they're showing one very important confidence and very important signal to the market that we're going to safeguard stability. And we're looking into the long-term good for this development in the Chinese financial market. And the rest of the stories that probably hasn't been witnessed, with the whole day's trade that the Shanghai index, the Shenzhen index and the Hang Seng index has been all rebounding very quickly back. So it shows that the government has really made very strong commitment. But also, I think at the end of today's trade you're going to see that confidence has already been passed far away to Hong Kong and then further influencing America," he said.
Qu said that China's deep integration into the global market and its strong manufacturing capabilities gives it advantages in dealing with the global economic turmoil brought about by U.S. tariff policies.
"I think China is very, very closely intertwined with the world market, for example, like the ASEAN nations, and for example, Latin America. In every each and every corner of the world production network, there is a part of China trying to provide its contribution towards the technology, funds, human resources, as well as for the logistic networks. So I think when you try to crush China or isolate China, it's basically irrational, because you are talking [about] isolating the whole world, the rest of the world, from your own economy," he said.
China shows strong determination to stabilize stock market: analyst
