China’s top securities watchdog has outlined its commitment to strengthening market stability in 2025 following a challenging start to the year. The China Securities Regulatory Commission (CSRC) highlighted the importance of stabilizing market expectations and emphasized its focus on creating a robust mechanism to support the market’s long-term stability. This statement came after the CSRC’s work meeting, which set the tone for its priorities in the new year.
In its announcement, the CSRC confirmed that it will collaborate closely with the People’s Bank of China (PBOC) to bolster the effectiveness of two key structural monetary policy tools. These measures are designed to provide additional market stability and support ongoing market momentum.
While the CSRC did not provide specifics on how the stabilization mechanism will operate, it emphasized the importance of enhancing policy guidance and quickly addressing market concerns. The commission’s plan includes facilitating smoother access for institutional investors to the PBOC’s liquidity support facility, which aids in stock purchases. The second tool involves a swap facility designed to help securities firms, funds, and insurance companies secure liquidity for equity purchases. Earlier reports indicated that the tools have an initial value of 800 billion yuan ($109 billion), with the potential to expand as needed.
Additionally, speculation has surrounded the creation of a potential state-backed stabilization fund as part of a broader stimulus package unveiled by Beijing in late September. However, there has been no further progress or updates on this initiative.
“The CSRC’s focus on stability serves to reassure investors, but without specific action, it’s more of a signal than a game-changing strategy,” noted Billy Leung, investment strategist at Global X ETFs. “Achieving long-term stability will likely require deeper structural reforms. At present, this approach feels more like an attempt to calm nerves rather than spark a substantial market shift.”
The Chinese stock market has faced persistent challenges, with investors spooked by rising geopolitical risks and the nation’s sluggish economic recovery. The market’s performance in 2025 had been particularly weak before January 14’s gains, marking its worst start to the year since 2016.
The CSRC also emphasized plans to streamline the entry of medium- and long-term capital into the market, aiming to increase institutional inclusiveness and adaptability. In addition, the regulator aims to boost the connectivity between Chinese and global capital markets, signaling a broader push to enhance China’s integration into the international financial system.
Despite the regulatory assurances, some market experts remain cautious. “This is a routine meeting, and what was conveyed aligns with the outcomes of the Central Economic Work Conference,” said Shen Meng, a director at Chanson & Co., a Beijing-based investment bank. He further noted that while concerns over a potential second Trump presidency have impacted the market, the current declines have not been severe enough to trigger the introduction of a stabilization fund just yet.
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