The CSRC said it will work with the People’s Bank of China to enhance the effectiveness of two structural monetary policy tools, while strengthening the construction of a market stabilisation mechanism.
The regulator didn’t provide details on how such a mechanism would work, but pledged to beef up its policy guidance, adding that it will promptly respond to market concerns.
One of the two structural monetary policy tools the CSRC referred to is a liquidity support facility that allows institutional investors to tap the PBOC for funding for stock purchases.
The second is a swap facility that lets securities firms, funds and insurance companies obtain liquidity from the central bank to purchase equities.
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The initial amount of the tools is 800 billion yuan ($149.54 billion), and could be doubled or even tripled depending on how much demand there is for the money, according to Governor Pan Gongsheng.
The formation of a possible state-backed stabilisation fund was among the items in Beijing’s broad stimulus package unveiled in late September to revive the economy and markets. There’s been no update on progress since then, however.
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“This is a regular work meeting and what’s conveyed here should not go beyond what’s been said at the Central Economic Work Conference,” said Shen Meng, a director at Beijing-based boutique investment bank Chanson & Co. Stocks have fallen recently due to concerns including a second Trump presidency, “but the declines aren’t steep enough for authorities to introduce a stabilisation fund yet”.
Investors have been shunning the Chinese equity market on concerns of increasing geopolitical risks and the country’s sluggish economic recovery. Stocks have stumbled in 2025, falling in all but one session. The benchmark CSI 300 Index has lost more than 5% so far this year, its worst such performance for the start of any year since 2016, data compiled by Bloomberg show.
The CSRC also pledged to streamline the entry of medium- and long-term capital into the market and enhance institutional inclusiveness and adaptability. The regulator added that it plans to increase connectivity between Chinese and global capital markets.
Chart: Bloomberg
