Chinese authorities have recently instructed major mutual funds to limit stock sales to help stabilize the market. This move comes after a decline in stock prices due to concerns over U.S. tariffs under President Trump, which has added strain to China’s economy. Reuters reports that the Shanghai and Shenzhen stock exchanges directed four large mutual funds to buy more stocks than they sold between December 31 and January 3.
This intervention is part of a series of efforts to maintain market stability. In recent months, China’s authorities have introduced measures such as swap and relending schemes, totaling 800 billion yuan, to encourage stock purchases. Over the weekend, the stock exchanges also met with foreign institutions to boost investor confidence.
In December, the Central Economic Work Conference identified stabilizing the stock and property markets as a key priority for 2025. Chinese stocks saw their first annual gain since 2020 last year, rising by 14.7%. However, much of this increase was driven by a brief rally following the announcement of a stimulus package in September.
These actions indicate that the Chinese government is working hard to prevent large-scale sell-offs and maintain a stable investment climate.
