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China Regulators Wield Power to Engineer Slow, Steady Bull Run
5 Sep
Summary
- Chinese investors expect Beijing to rein in rally and prevent speculative bubble
- National team funds now own $200 billion in ETFs, giving them sway over prices
- Regulators considering measures like easing short-selling curbs to dampen speculation
As of September 5th, 2025, Chinese investors are placing their faith in the government's ability to guide the stock market towards a slow and steady rise, in contrast to the previous cycles of boom and bust. The benchmark CSI 300 Index has surged over 20% from its April lows, and fund managers within China increasingly expect Beijing to rein in the rally before it becomes a speculative bubble.
Regulators are already taking steps to curb excessive speculation, including considering the removal of some restrictions on short selling and policies to dampen speculative trading. While these moves may cause short-term pain, they are fueling hope among local investors that battle-hardened regulators and the powerful "national team" of state-linked funds can effectively manage a prolonged rise in share prices.
The national team funds now own around $200 billion in exchange-traded funds, giving them significant sway over the direction of stock prices. This, combined with the variety of policy tools available to the China Securities Regulatory Commission, has led many to believe that the conditions are ripe for a "slow bull market" this time around, unlike the volatile cycles of the past.
