Chinese Premier Li Qiang called for more forceful measures to support market after stock sell-off

 

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China’s Premier Li Qiang asked authorities to take more forceful and effective measures to support the stock market and investor confidence after the country’s A-share market slumped and the blue-chip CSI 300 Index hit a five-year low on Monday.

“China will consolidate and strengthen the upward trend of the economic recovery and promote the stable and healthy development of the capital market,” Li said at a State Council meeting on Monday, according to state broadcaster CCTV.

China will also increase mid and long-term capital into the market and strengthen the “internal stability” of the market, it added.

The State Council emphasized the need to enhance the quality and investment value of listed companies, increase flows of medium- and long-term funds into the market, and strengthen the market’s inherent stability.

Other measures included strengthening the regulations that govern capital markets. China also needs to improve the consistency of its macro policies in order to consolidate the nation’s economic recovery, the State Council said after the meeting.

Chinese equities have sold off for most of the past year, hurt by factors ranging from a protracted crisis in the housing market to persistent deflationary pressures in the wider economy. Beijing’s policy response so far has failed to buttress sentiment among investors hoping for even easier monetary conditions or a big lift in fiscal stimulus.

A rally in late 2022 sparked by China’s lifting of draconian Covid restrictions proved short-lived, with concerns about poor consumer confidence among the factors weighing on equities. The CSI 300 has slumped some 20% over the past nine months.

China has in the past sometimes deployed state assets to intervene in the markets. The country’s sovereign wealth fund made such a move in October.