China plans to allocate $287bn to stabilise the falling stock market

Economy

The Chinese authorities are considering creating a special fund of 2 trillion yuan to stabilise the shattered stock market.

China plans to allocate $287bn to stabilise the falling stock market
It is planned to extract funds mainly from offshore accounts of Chinese state-owned companies, with subsequent channelling them to purchase shares through the Hong Kong Stock Exchange. Moreover, 300bn yuan ($42bn) of domestic funds have already been earmarked for equity investments.

These moves are aimed at preventing a stock market crash in China, with indices hitting five-year lows. Since the beginning of 2021, the total market capitalisation of Chinese companies has fallen by $6 trillion.

In addition to creating a special fund, Beijing is making efforts to reassure domestic investors, but specific measures have not been specified.

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