Chinese state funds deploy $7.38bn to halt market sell-off
State-backed investors CRHC and Chengtong have injected over 60 billion yuan into Chinese equities to stabilize a market reeling from a broad retreat in AI-related technology stocks.
Two Chinese state-owned capital operators have launched a coordinated equity buying programme. The entities are deploying more than 60 billion yuan to stem a severe market sell-off.
CRHC, a state-owned capital operator, said its affiliated entities have allocated over 50 billion yuan through special relending facilities and matching funds. This capital is explicitly targeted at supporting share buybacks and increasing stakes in listed companies. The firm stated it remains optimistic about the long-term outlook for China's capital markets and plans to continue utilising the relending programme alongside its own capital to accumulate shares in centrally administered state-owned enterprises.
In a parallel move, China Chengtong Holdings Group purchased nearly 10 billion yuan worth of domestic equities. Chengtong signalled its intention to further increase investments across central SOE stocks, technology companies, and exchange-traded funds.
These interventions arrive after Chinese equities suffered steep losses last week. A global retreat from artificial intelligence-related stocks triggered broad selling across technology-heavy markets. The STAR Market Index, which tracks many of the country's leading semiconductor companies, has fallen approximately 25 percent from its July 1 peak. This decline has erased more than 4 trillion yuan in market value.
For institutional investors, the deployment of relending facilities is a critical detail. It indicates that central bank liquidity is being indirectly channelled into the equity market via state entities. This mechanism effectively establishes a managed floor beneath stock prices without requiring direct central bank intervention.
By directing capital toward state-owned enterprises and broad ETFs, authorities are attempting to stabilise the wider market rather than defending specific private tech valuations. Both CRHC and Chengtong expressed confidence in the economy's prospects and committed to supporting the stable functioning of the stock market. This language signals to traders that further state-backed interventions will follow if volatility escalates.
