China Plans 200 bn yuan Lending Boost as Regulators Meet Banks to Aid Stock Market

China's top financial regulators will meet banks and securities firms on Monday to discuss ways to support the capital market and stop the recent slump in Chinese stocks. The People's Bank of China, the National Financial Regulatory Administration and the China Securities Regulatory Commission are all holding meetings with major banks to study how to optimise lending programmes for stock buybacks, Cailian reported. Notices have also been sent to certain securities firms and funds for a morning meeting with the PBOC and CSRC, according to the 21st Century Business Herald. A major state‑owned bank plans to raise its lending quota by up to 200 billion yuan for two state asset‑management firms that belong to the so‑called “National Team”, aiming to fund stock purchases. The move adds to last month’s steps to stabilise the equity market, but those measures have not halted a weak domestic economy and doubts over AI earnings. Chinese equities posted their worst month in more than a decade, with the CSI 300 Index slipping into a bear market in October, down 8.5% and falling for a record 12 straight weeks. "The meeting will have a positive impact on the market in the short term, but policy signals like this cannot change the underlying economic trajectory on their own," said Shen Meng, director at Beijing‑based investment bank Chanson & Co. He added that medium‑ to long‑term improvement still needs structural reforms and supportive fiscal or industrial policies. It is unclear how much of the new quota will be used immediately to buy stocks, though the amount exceeds the 180 billion yuan initially allocated to China Reform Holdings and China Chengtong Holdings when they first joined the programme. The downturn has coincided with a contraction in both manufacturing and non‑manufacturing PMI readings in October. In September 2024, the PBOC introduced a swap facility for securities firms, fund managers and insurers to exchange eligible assets for liquid central‑bank assets, and a relending facility that offers low‑cost funding to banks for share buybacks and stake increases by listed companies and major shareholders. ## Context The meeting reflects Beijing’s ongoing effort to inject liquidity into a shaky market while broader economic challenges, such as slowing growth and tech‑sector concerns, continue to weigh on investor confidence.