Beijing intervenes with state-backed buying and a stability meeting after a 10 trillion yuan market selloff sparks liquidity concerns.
China’s securities regulator convened a market stability meeting as state-owned firms deployed 110 billion yuan to counter a two-week selloff that erased 10 trillion yuan. The intervention follows a 25% drop in tech-heavy STAR Market stocks since early July, driven by liquidity fears tied to a major IPO and global chip sector declines.
Markets opened higher on Monday, with the Shanghai Composite, Shenzhen Composite, and CSI 300 rebounding. The move suggests Beijing is prioritizing stability over a natural correction, though sustained recovery hinges on easing geopolitical tensions and restoring investor confidence.
State-backed buying targeted tech stocks, which bore the brunt of recent losses. Analysts note the bounce may be short-lived without broader policy support or a shift in global sentiment.