China’s financial sector authorities have proposed setting up a stock market stabilisation fund to boost flagging confidence among domestic investors, as a new release of data showed the recovery in the world’s second-largest economy remains fragile.
Four people familiar with the matter have said Beijing is considering the plan, which would probably invest in domestic equities through existing financial institutions and professionally managed funds, according to one of the people. The government money would be matched by its partner funds and institutions, the person added.
Two of the people said that financial sector regulators including the stock market watchdog — the China Securities Regulatory Commission — and the Ministry of Finance have submitted the proposal to the State Council, China’s cabinet, which would ultimately decide how the proposed fund would operate.