The concepts of calm and serenity loom large in Chinese culture. That includes its stock market regulators, who are taking steps to support the domestic A-share market during the National People’s Congress.
Bloomberg reports that large mutual funds are banned from making net sales of stock, while state-backed investors are poised to step in should the market drop. The move recalls a 2015 measure to prevent big shareholders from selling stock.
That was in response to a market rout, whereas the latest move is precautionary window-dressing ahead of a sensitive political event. Both are part of a broader support operation. A “national team” buys shares when needed. New flotations — the state influences both the timing and the pricing of these — are often engineered to produce large first-day gains. Companies have wide latitude to suspend their own shares.