Wealth fund intervenes in fall in Chinese stocks

China responded to the inevitable decline in stock markets with a wealth fund this time. The Chinese wealth fund Central Huijin Investment announced that it would continue to increase its ETF position. Immediately following this statement, the Chinese capital markets board announced that it would support other long-term funds to enter the stock markets more intensively. The board also announced that it would support publicly traded Chinese companies to increase their share buybacks. The statements came after the Chinese CSI 300 index fell to its lowest level in five years on Friday last week. Long Hui Fund Management Investment Director Zhou Nan commented, “Huijin’s announcement may lead to more funds switching to buying. This statement also confirms market speculation that the state has been making more purchases recently. There is very limited room for further decline in Chinese stock markets, but volatility may continue until the bottom levels stabilize.” Chinese President Xi Jinping will discuss the Chinese stock market with regulatory bodies. Inflows to indices tracking some ETFs broke records in January, with purchases by state-backed funds called “national teams” in China.