China directs funds to stabilise stock market amid Trump tariff threats
Investments from the National Social Security Fund, mutual funds and other sources will be increased to boost the stock market, regulators say
Chinese regulators have unveiled an action plan to direct investment funds to stabilise the nation’s stock markets, amid rising tensions with the US following President Donald Trump’s threat to impose tariffs.
China will direct medium- and long-term funds, including commercial insurance funds, the National Social Security Fund and mutual funds, to increase their participation in the stock market, according to a joint statement on Wednesday from multiple government agencies, including the China Securities Regulatory Commission (CSRC), the Ministry of Finance, the People’s Bank of China (PBOC) and the National Financial Regulatory Administration.
The proportion of the funds’ investments in the stock market would be gradually increased and a long-term system will be set up to track these investments, the statement added.
The action plan to “stabilise the stock market, removing barriers for medium- and long-term funds to enter the market” was a follow-up to a series of policies introduced last year to boost the Chinese economy and sluggish stock market, the statement said.
The plan comes as China tries to navigate uncertainties in Trump’s second term. On Tuesday, Trump said he was considering a 10 per cent tariff on Chinese exports from February 1, as a penalty for the flow of fentanyl, which is responsible for thousands of deaths in the US annually.
Chinese stocks slipped in the first week of 2025 for their worst start to a year since 2016. On Wednesday, benchmarks in Shanghai and Hong Kong tumbled on the tariff proposal and an investment plan to “beat China” in artificial intelligence.
