When your stock market drops 25% in less than three weeks, you don’t send a memo. You send money. That’s exactly what Beijing did on July 19, with state-backed funds pouring over 50 billion yuan, roughly $7.38 billion, into domestic equities in a single day.
China Reform Holdings Corp led the intervention, channeling capital through special relending mechanisms and private funds to prop up centrally managed state-owned enterprises. China Chengtong Holdings Group followed with a commitment of nearly 10 billion yuan for ongoing purchases of central SOEs, tech stocks, and ETFs.
A 4 trillion yuan problem
The trigger was the STAR Market, China’s Nasdaq-equivalent board for growth and tech companies. It fell approximately 25% from its July 1 peak, erasing more than 4 trillion yuan in market capitalization.
The China Securities Regulatory Commission scheduled a symposium for July 20 with listed companies, institutional investors, and other market participants to hash out concrete stabilization measures.
