Since April 2025, more than 300 listed companies in China have announced share buyback plans or major shareholder increases, with total commitments surpassing ￥100 billion. State-owned enterprises like China Chengtong and China Reform Holdings have further reinforced this trend, allocating ￥180 billion to strengthen holdings in their portfolio firms. These measures complement the PBOC’s monetary policy tools introduced in October 2024, which have since been consolidated into an ￥800 billion liquidity pool with interest rates reduced by 25 basis points to 1.5%.
Policy Framework Strengthens Market Confidence
By the end of April 2025, significant progress had been made under the PBOC’s initiatives. Financial institutions have secured ￥200 billion in loan agreements to support buybacks and equity increases, with disclosed ceilings exceeding ￥110 billion. Meanwhile, the Securities-Fund-Insurance Swap Facility has deployed ￥105 billion across two batches, while over 500 companies have accessed ￥300 billion in loans for equity management. These mechanisms are designed to enhance market stability while maintaining flexibility for participants.
Central Bank Emphasizes Market-Driven Approach
PBOC Governor Pan Gongsheng highlighted the policy tools’ market-oriented design, stating they provide low-cost funding to commercial banks while allowing firms to independently determine the timing and scale of their actions. With loan rates now around 2%—below average dividend yields—the cost efficiency for issuers has improved significantly. This approach ensures liquidity support without distorting market mechanisms.
Experts Highlight Long-Term Benefits
Industry analysts have praised the initiatives for their structural impact. CICC’s Li Qiusuo noted that share repurchases reflect corporate confidence and contribute to better governance and equity structure optimization. NIFD’s Pang Ming emphasized that the policies adhere to marketization and rule-of-law principles, expanding the PBOC’s role in financial stability while promoting efficient capital allocation.
Stabilization Effects Become Evident
The combined quota system has already demonstrated tangible results, reducing market volatility and encouraging value-driven equity management. The integration of previous liquidity tools into a single, larger facility has enhanced operational flexibility, allowing for more responsive policy adjustments as market conditions evolve.
Future Policy Adjustments Anticipated
Analysts expect further refinements to sustain momentum in China’s capital market reforms. Potential measures include expanding quota ceilings to accommodate growing demand. As Pang Ming suggested, the next phase could involve scaling up existing mechanisms to reinforce long-term stability and investor confidence in the market’s trajectory.
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