The national team emerges to support A-shares
Beijing has deployed members of the “national team” to bolster the A-share market.
On July 19, China Reform Holdings and China Chengtong Holdings – two central government-owned investment firms – said they have increased their holdings of Chinese equities.
ICYDK: The last time the firms publicly disclosed they were buying A-shares was in April 2025, after stock prices dipped following the Trump administration’s liberation day tariffs.
- Back then, the two firms spent RMB 80 billion and RMB 100 billion, respectively, using funds borrowed through a PBoC relending facility.
This time, the intervention was more modest.
- China Reform said it purchased RMB 50 billion worth of stocks with funds borrowed via the relending facility to help maintain stock market stability.
- Chengtong said two of its subsidiaries invested RMB 20 billion.
Some context: A-share valuations have collapsed over the past month, with the CSI 300 Index down more than 9% since its June 22 peak.
- The decline was led by tech stocks, with the Star 50 Index dropping 17% last week.
More context: Over the last few years, Beijing has been reluctant to prop up A-shares with direct intervention, instead pursuing a "slow bull" market built on stricter market discipline, higher dividend payouts, and a bigger role for institutional investors.
Get smart: That Beijing deployed less than half the firepower it used in April 2025, despite a tech selloff that's arguably sharper this time, suggests the national team is being used to signal support and steady sentiment, not to actually offset the scale of the rout.
The upshot: Don't expect a stock market rebound.
- The undersized intervention fits Beijing's slow bull preference for cushioning panic rather than reflating valuations.
