A unit of China’s sovereign wealth fund has booked more than $50 billion in paper gains from heavy buying of local exchange-traded funds, underscoring the scale of Beijing’s efforts to prop up its stock market, according to Bloomberg Intelligence.
Central Huijin Investment Ltd., part of China Investment Corp. and a key member of the so-called National Team of state-backed investors, began ramping up ETF purchases in 2023 and held about $180 billion of such assets at the end of August, filings show. The aggressive buying has helped stabilize equity markets and fueled a rally that lifted major benchmarks to multi-year highs.
The strategy has made China’s ETF market the largest in the Asia-Pacific region, surpassing Japan’s. But it also raises questions about whether the rebound in Greater China’s bourses reflects genuine investor demand or government-driven liquidity. The People’s Bank of China said in April it would expand funding support through a relending program to Huijin to help maintain market stability.
Bloomberg Intelligence analysts Rebecca Sin and Jack Wang said the data point to strong institutional activity. “Huijin appears to have secured substantial funding for its ETF purchases,” they wrote. High turnover in ETF trading relative to transaction numbers suggests institutions, not retail investors, are driving the market, they added.
Huijin’s largest holdings include the Huatai-PineBridge CSI 300 ETF and the E Fund CSI 300 ETF, with positions worth about $45 billion each. Those investments alone generated roughly $15 billion in gains, while the E Fund ChiNext ETF surged 51%, contributing further to the fund’s windfall.
CIC representatives did not immediately respond to requests for comment, while the central bank declined to comment.
