Chinese authorities are considering creating a special fund to stabilize the crashing stock market. By agency BloombergIts size could be around 2 trillion yuan or $278 billion.
The funds are planned to be withdrawn mainly from offshore accounts of state-owned Chinese companies. They will then be directed to purchase shares through the Hong Kong Stock Exchange. In addition, 300 billion yuan ($42 billion) has already been allocated from domestic funds for equity investment.
These measures are designed to stop the collapse of the Chinese stock market, which has seen its indexes fall to their lowest level in 5 years. Since the beginning of 2021, the total capital of Chinese companies has decreased by $6 trillion.
In addition to creating funds, Beijing is also trying to reassure domestic investors. However, the institution does not specify what measures are used for this.
Previously, rating agency Moody’s had downgraded the outlook for Chinese government bonds to negative. Analysts believe that China has entered a period of economic stagnation due to the crisis in the construction industry and the decline in foreign investments.
Last week, it became known that there was an inflow of foreign direct investment to China for this year. decreased by 8%.
Previous Russian investments bonds The United States has fallen to its lowest point.