(Bloomberg) — China’s top securities regulator said it will work on building a mechanism to stabilize the market, vowing to anchor market expectations in 2025 after a disappointing start to the new year.
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The China Securities Regulatory Commission said stability is top of its agenda in 2025 as it pledged to make every effort to induce and maintain the market’s stabilizing and positive momentum, according to a statement following its work meeting on its priorities for the year.
The CSRC said it aims to better leverage two structural monetary policy tools with the People’s Bank of China, and to strengthen the construction of a market stabilization 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 mentioned is a liquidity support facility of at least 800 billion yuan ($109 billion) 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.
The formation of the state-backed stabilization 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.
Investors have been shunning the Chinese equity market on concerns of increasing geopolitical risks and the country’s sluggish economic recovery. Stocks have stumbled into the new year, 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.
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