China Unveils Measures to Stabilize Stock Markets Amid Trump Uncertainty

In an effort to mitigate the uncertainty around a second Donald Trump administration, China announced a number of measures to stabilize its stock markets, including proposals to increase the amount that pension funds can invest in the country's listed companies.

The central government issued a direction to “steady the stock market, and clear bottlenecks for the introduction of mid-long term capital,” according to a notification released by the China Securities Regulatory Commission (CSRC). At 9 a.m. on Thursday, central bank official Zou Lan, Deputy Finance Minister Liao Min, and CSRC chairman Wu Qing will deliver a briefing.

“I think this is a long term positive, similar to what Japan did with the Government Pension Investment Fund during the Abenomics with a shift towards a higher domestic equities allocation,” said Kevin Net, head of Asian equities at la Financière de l’Echiquier. “Not sure this will have much of an impact in the short term though.”

After a brutal year marred by a collapse in the real estate sector and a decline in consumer confidence, Chinese stocks began 2025 with their worst start in nine years. In order to counteract the unrest caused by Trump's second term as US president, analysts had anticipated that the Chinese government would release additional weapons.

One day after taking office again, Trump expanded his tariff threats to include China. Following Trump's most recent remarks, Chinese stocks experienced a fall, with the Hang Seng China Enterprises Index performing the worst in Asia and the onshore benchmark CSI 300 Index recording its first drop in five days. Even if the 10% threshold is less than the 60% possible tariffs on Chinese goods that Trump suggested during his campaign, markets are still expecting greater turbulence.