CBN丨China moves swiftly to stabilize stock market amid global financial turbulence

Hi everyone. I’m Stephanie LI.

Coming up on today’s program

• Chinese state-owned investment funds raise ETF holdings, while SOEs and listed firms announce buybacks to stabilize capital market;
• China takes strong stance against US threat of additional 50% tariff.

Here’s what you need to know about China in the past 24 hours

China has launched its own version of a "stock market stabilization fund" as the country's central bank vowed to provide funding support for the Central Huijin Investment Ltd to increase holdings in the A-share market.

On Tuesday, the People's Bank of China said it firmly supports Central Huijin's efforts to increase its holdings of stock market index funds and will provide sufficient re-lending support to Central Huijin when necessary to resolutely maintain the steady operation of the capital market.

This came after Central Huijin, an arm of China's sovereign wealth fund, provided liquidity to the A-share market during the slump on Monday by increasing its holdings in exchange-traded funds while vowing to further increase its exposure.

Chinese stocks rebounded today, with the benchmark Shanghai Composite Index advancing 1.6 percent. Hong Kong’s Hang Seng Index also regained 1.5 percent.

State-owned asset manager China Reform Holdings said its subsidiary Guoxin Investment Group will hike its holdings of central SOEs and tech stocks and ETFs through a special reinvestment fund, with an initial investment of 80 billion yuan.

China Chengtong Holdings Group, a capital operation platform of the State-owned Assets Supervision and Administration Commission of the State Council, said late Monday that its financial subsidiaries have increased their holdings of ETFs and shares of central SOEs, to firmly safeguard the stable operation of the capital market.

On Tuesday, China’s Social Security Fund announced that it has recently actively increased its holdings of domestic stocks and will continue to do so in the near future. While the National Financial Regulatory Administration said it has allowed more equity asset allocation by insurance funds.

Meanwhile, several Chinese central SOEs and private enterprises have rolled out share repurchase initiatives. China’s three energy majors, Sinopec, PetroChina and CNOOC, on Tuesday have all disclosed similar buyback plans that worth between 3 billion and 5.6 billion yuan over the next 12 months, while China Electronics Technology Group Corporation said it had already completed over 2 billion yuan in buybacks.

Listed firms are making similar moves, with CATL saying on Tuesday that it will repurchase shares worth between 4 billion and 8 billion yuan using its own or raised funds, and Zijin Mining said it plans to use up to 1 billion yuan of its own money to repurchase A-shares. The newly-merged brokerage titan Guotai Haitong has proposed a repurchase plan of up to 2 billion yuan, while China Merchants Group's 7 listed firms pledge to accelerate share buybacks.

• China on Tuesday vows to retaliate and fight till the end after the US threatened to impose a further 50 percent tariff on the nation. "China firmly opposes this. If the US escalates tariffs, China will resolutely take countermeasures to safeguard its own rights and interests," a spokesperson for the Ministry of Commerce said. "The US' threat to escalate tariffs on China is a grave mistake on top of an existing one, which once again exposes the US' blackmail nature. China will never accept this. If the US insists on its own way, China will fight to the end," said the ministry.

GBA express

• Hong Kong Chief Executive John Lee Ka-chiu on Tuesday slammed the US for undermining global trade and bringing risks and uncertainties to the world through its “reckless imposition of tariffs”. “The US no longer adheres to free trade, arbitrarily undermining the internationally established rules of world trade, and its ruthless behavior damages global and multilateral trade,” he said. According to Lee, Hong Kong will seize national development opportunities and integrate itself into the national development framework. He said the city would also strengthen international exchanges and deepen regional ties by signing more free trade agreements with other countries.
• The Hong Kong-Zhuhai-Macao Bridge saw a surge in traffic over the Qingming Festival holiday, with both passenger and vehicle numbers reaching record highs for this time of year. From April 4 to noon on April 6, more than 272,000 travelers and 57,000 vehicles crossed the border at Zhuhai Port, marking year-on-year increases of 32.1 percent and 41.7 percent, respectively, according to data from border authorities.
• Hong Kong will offer “any possible help” to social media influencers who want to promote the city through live streams, the chief executive has said after YouTube star IShowSpeed’s visit, which some saw as a missed opportunity to highlight local signature features. John Lee Ka-chiu said on Tuesday that he paid close attention to IShowSpeed’s visit, adding that authorities proposed to help the 20-year-old live stream across the city, but he did not take up the offer. IShowSpeed, who recently visited Hong Kong and Shenzhen, has more than 38.4 million followers on YouTube.

Industry and company news

• A growing number of Chinese tourists embarked on domestic trips during this year's Qingming Festival, contributing to nearly 7 percent growth in tourist spending. From April 3 to April 6, around 126 million tourists traveled domestically, marking a 6.3 percent year-on-year increase, the Ministry of Culture and Tourism announced yesterday. With Tomb Sweeping Day falling on Friday, April 4, this year’s long weekend boosted tourism expenditures, rising 6.7 percent to 57.5 billion yuan.
• Alibaba-backed Moonshot AI said it had changed the price system of its Kimi AI models, with the cost of the Kimi-latest-8k model down to 2 yuan per million input tokens and 10 yuan per million output tokens from unified 12 yuan per million input/output tokens.
• BYD rose after the Chinese EV and battery giant said it expects its first-quarter net profit to have jumped between 86 and 119 percent to 8.5 billion to 10 billion yuan from a year ago. BYD also announced yesterday it entered the Nigerian market with the Yuan Plus and Dolphin, while also launching its premium Denza brand in Europe to support its global expansion.
• Chinese carmaker Great Wall Motors said today it inked a deal with Unitree Robotics to ally on robotics tech and intelligent manufacturing, covering humanoid and quadruped robots, hardware and software development, and intelligent control systems.
• Apple’s iPhone production costs could reportedly surge by 50 percent per unit due to US’ latest tariff shock, as most iPhones are assembled in China. The latest US tariffs could lead to annual losses of up to USD33 billion for Apple, Morgan Stanley estimated.
• China Railway will pilot a pet transport service on some high-speed trains on the Beijing-Shanghai route from today. Passengers need to make online reservations at least two days in advance to carry with them one healthy domesticated cat or dog with certain limits in size.

Asia-Pacific highlights

• The Asia-Pacific stock market experienced a significant rebound today. The Japanese Nikkei 225 Index and the South Korean KOSPI Index each surged by 6 percent. Australia’s ASX 200 climbed 2.3 percent, and India’s Nifty 50 futures pointed to a higher open. In contrast, Southeast Asian markets continued their downward trend, with Singapore’s Straits Times Index falling 1.4 percent, Vietnam’s VN plunging 6.4 percent, Thailand’s SET down 4.8 percent and Indonesia’s JKSE slumping 8.3 percent.

Executive Editor: Sonia YU

Editor: LI Yanxia

Host: Stephanie LI

Writer: Stephanie LI

Sound Editor: Stephanie LI

Graphic Designer: ZHENG Wenjing, LIAO Yuanni

Produced by 21st Century Business Herald Dept. of Overseas News.

Presented by SFC

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