China’s Sovereign Wealth Fund Buys Bank Shares to Shore up Stock Market

According to the filing on Wednesday (11 Oct), the $1.4 trillion China’s sovereign wealth fund, Central Huijin Investment Ltd. has increased its stake by a total of $65 million worth on national state-owned banks including, Bank of China Ltd., Agricultural Bank of China Ltd., China Construction Bank Corp. and Commercial Bank of China Ltd.


Bloomberg viewed that the massive share purchasing that has never been seen since 2015, is a rescue effort from Chinese authorities to prop up the stock market that many urged to do so. Thursday (12 Oct), Shanghai’s SSEC gained by 0.94% to 3,107.9 and Shenzhen’s SZI gained by 0.83% to 10,168.49.

This news report came after the unconfirmed 1-trillion yuan stimulus report a day or two earlier, that the Chinese government may spend on water infrastructure to boost its economy and agriculture sector.


In recent years, there’s been some reports from China that the local banks were in financial troubles, as some of those whose impact held their protests but got suppressed instead of their money back.

Meanwhile, the on-going real estate crisis also exacerbated the bank issue, as people who can’t recover from covid-19 would default on their loans which they borrowed for the unfinished housing. Many Chinese real estate giants could not continue their operation cycles as before and so the business can’t pay up to the larger banks as well.