China mobilizes state funds to halt stock market decline

China is mobilizing state-linked investment funds to stabilize its stock markets after significant declines in technology shares. The CSI 300 index has dropped about 20% since June, entering a bear market. Economic slowdown and reduced expectations for large fiscal stimulus have contributed to this downturn. In Hong Kong, investors from mainland China have sold HK$20 billion in shares since early October, potentially marking the largest capital outflow since July 2021. The national team of state-linked funds has been buying shares to discourage further market exits. Analysts warn that while these purchases may temporarily stabilize markets, a sustained recovery will depend on internal demand and the resolution of ongoing economic challenges, including a weak housing sector and regulatory pressures.