Chinese authorities are reportedly attempting to inspire calm in the domestic market sell-off by injecting funds and banning search phrases.
China’s CSI 300 Index has seen a 14 percent peak-to-trough drop since February, wiping out all of its gains year-to-date and some more, amid Beijing’s annual session of the National People’s Congress.
In response, Chinese authorities are allegedly utilizing various methods to inspire calm and prevent a further slide in markets.
«National Team»
State-backed funds – known as China’s «national team» – intervened yesterday to prop up markets, according to a «Bloomberg» report citing unnamed sources, by actively buying shares through cross-border channels.
In a separate Goldman Sachs report, the unit is also discussed with estimates that they hold 3.3 trillion yuan ($500 billion) worth of China A-shares, as of the third quarter of 2020.
Oft-cited members of the national team include: China Securities Finance, a margin financier for Chinese brokerages; Central Huijin Investment, a part of China’s sovereign wealth fund; the State Administration of Foreign Exchange, China’s foreign exchange market regulator; the National Social Security Fund; and some state-backed brokerages.
Internet Censorship
Direct market intervention aside, authorities are also believed to be interfering in the flow of information by actively censoring search phrases.
A separate «Bloomberg» report claims that a search of the Chinese equivalent of «stock market» on local social media platform Weibo generated no posts today.
