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China’s Market-Moving ‘National Team:’ All You Need to Know

A sudden rebound in the CSI 300 index on February 8 triggered speculation that China’s “national team” was once again intervening in the stock market.

Easing Covid rules and a commitment to supporting the economy are luring investors back to China's equity markets.
Photo: AFP.


After slumping into a bear market before China’s Lunar New Year holiday, the benchmark CSI 300 index suddenly rebounded from an intraday low on February 8 amid reports of state entities buying large-cap bank and public utility shares.

The episode triggered a wave of speculation among investors on whether China’s so-called ‘’national team’’ of state-owned investors was back.

The team’s most famous intervention came in 2015, when state-run media reported state-backed funds to the tune of 1 trillion yuan ($158 billion) were deployed to stabilize the market after a rout triggered by a shock yuan devaluation.

Western media reports suggesting that the hand of the state was again in play last week were swiftly denied by the China Securities Regulatory Commission, but many analysts remain unconvinced.

Here’s what you need to know about China’s shadowy “national team’’:


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What is the “national team?’’

The “national team’’ is assumed to be an ad-hoc task force made up of state regulators, state-owned or backed securities firms, brokers, funds and banks that pool their buying power to prop up or pump stock prices.

Once Beijing gives the nod, these players are tasked with strategic buying to send a clear message to investors not to bet against the state. Usually, big-cap stocks with large index weightings are targeted, as seen back in the epic 2015 tussle.

China’s “national team’’ is assumed to be an ad-hoc task force made up of state regulators, state-owned or backed securities firms, brokers, funds and banks that pool their buying power to prop up or pump stock prices.

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Why Intervene Now?

The most likely explanation is that Beijing believed the market had fallen too far and also wanted a rosy backdrop for the Winter Olympics currently underway. It has always disliked turbulence before high-stakes events, such as the 20th Party Congress later this year, when a new Politburo will be formed to work under President Xi Jinping.

There has long been speculation that the “national team’’ intervenes to smooth prices when major events take place, including the annual meeting of parliament in Spring, and important anniversaries.

“The national team stands ready and no stock rout is allowed to rain on Beijing’s big events when the ruling elite, including financial big shots, converge for a big conference,” wrote Ai Tangming, a financial commentator with news portal Sina.com.

The other factor is that the stock market failed to respond to substantial policy easing. When disappointing consumption during the week-long Lunar New Year holiday further soured market sentiment, policymakers may have felt compelled to deploy the ”national team.”

What’s the Evidence?

Despite the China Securities Regulatory Commission’s denial of any intervention, CSRC chairman Yi Huiman said in January that major brokers and securities firms should heed the state’s call, to dovetail with regulators and take the lead to contribute to stability.

Also in January, the Securities Daily, under the umbrella of the Chinese State Council-supervised Economic Daily Group, heralded the national team’s move in a front-page op-ed that called on stakeholders to “stiffen their spines.”

A day after the apparent intervention, the state-run China Securities Journal said “mysterious funds” had pushed the Shanghai-listed shares of China Mobile to surge by the daily 10% limit, suggesting that it may signal a bottom in sentiment for the market.

On February 10, the Securities Times, a sister publication of the top Communist Party mouthpiece the People’s Daily, referred to the “national team’’ in a report and prodded investors to “have faith, and buy the dip.’’

Parallels With 2015  

Comparisons have been made between the recent intervention and 2015, when the national team salvaged China’s stock market from a steep plunge.

“Beijing’s move is more pre-emptive now than then,” said Wu Xiaobo, a lecturer in business at Shanghai Fudan University.

He noted, too, that the national team was only called upon after the central bank’s policy easing failed to stem the stock market slide.

Beijing now prefers small, quick and frequent “sorties and corrections” to stabilize the market, rather than a full-blown war to win a pyrrhic victory like what happened in 2015,” Wu said.

The Doubters  

Not all analysts agree that the ‘’national team’’ has swung into action again.

“Yes, the market almost plunged into bear territory since January, but it was not staring down an abyss like in 2015,” said Zhao Wenli, head of research at China Construction Bank International, adding that he does not believe the rebound last week was driven by any “state-led force.”

Because there was no rout, all-out, state-led intervention was not warranted, he said.

Last week’s market buying could be due to “spontaneous moves” by state-owned and backed brokers and funds to become overweight in big-cap shares to augment the central bank’s reflationary easing, according to an official with a state-owned securities company in Shanghai, who spoke on condition of anonymity.

What’s Next?

Whatever happened last week, the market has stabilized, at least for now. Since the February 8 close, the CSI 300 index has gained almost half a percent though it’s still fallen almost 6% for the year and is down a tad short of 20% from a  year ago.

Hopes are high though that Beijing’s focus on stability ahead of the Party Congress means it is putting a floor under major stock benchmarks and that at least until then the downside is protected.


  • By Frank Chen


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Frank Chen

Frank Chen is an Asia Financial correspondent who covers China business and finance with a special focus on market indexes. He has a keen interest in real estate, transport, infrastructure and consumer brands. He spends time in Shanghai and Hong Kong and speaks Mandarin, Cantonese, and English.


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