Chinese officials are considering to implement numerous stimulus measures to stabilize and revive the stock market. One measure is to establish a fund of approximately $281 billion USD (two trillion RMB) to buy shares using Chinese State-Owned Enterprises (SOE) via the Hong Kong Exchange link.
According to the report, the funds would be invested in onshore shares through SOEs such as China Securities Finance and Central Huijin Investment.
While Chinese stocks rose after the release of the report, they decreased a few hours later with the stocks remaining mostly flat by the end of the trading day. However, Chinese officials will also enact the other measures later in the week if they receive approval.
The measure came after Chinese Premier and member of the Chinese Communist Party Standing Committee Li Qiang held a State Council meeting on January 22nd. Li said the government would increase the injection of mid- and long-term funds into capital markets to enhance its stability and boost confidence.