National Team ETFs draw 29 billion yuan in four-day buying spree

China's state-backed funds poured 29 billion yuan into domestic equities over four sessions, the most aggressive buying in 15 months, signaling Beijing's resolve to support a struggling market.

China's "National Team" exchange-traded funds absorbed a net 29 billion yuan ($4 billion) in the four sessions through July 16, the largest such inflow since April 2025, according to Goldman Sachs Group Inc.

"This is the most concentrated state-backed buying we've tracked in over a year," said Kinger Lau, chief China equity strategist at Goldman Sachs, in a July 17 note. "It signals that authorities view current valuations as a buying opportunity."

Goldman's proprietary tracking metric captured the inflows across a basket of ETFs managed by China's state-owned asset managers, including ChinaAMC, E Fund and China Southern Asset Management. The 29 billion yuan tally over four trading days eclipses any comparable stretch since April 2025, when the National Team last intervened during a market downturn.

The buying spree comes as the CSI 300 Index has struggled to hold gains above 3,800 points amid a slowing economic recovery and persistent deflationary pressures. State-backed purchases provide a short-term floor for equities, but their effectiveness depends on whether retail and foreign investors follow — or use the liquidity to exit positions.

The People's Bank of China has kept its 1-year medium-term lending facility rate at 2.5% since a 20-basis-point cut in September 2025, while the 1-year loan prime rate stands at 3.0%. The latest ETF buying represents a separate policy tool — direct equity market intervention through state-owned fund managers — rather than monetary easing. The offshore yuan traded near 7.25 per dollar during the inflow period, little changed from the prior week, suggesting the buying has not yet spilled into currency markets. The Hang Seng Index in Hong Kong rose 1.2% over the same four days, partly tracking the mainland rally.

Historical precedent suggests these interventions can stabilize markets temporarily. During the previous large-scale National Team buying in April 2025, the CSI 300 rose about 4% in the two weeks following the inflows before giving back half those gains over the subsequent month. The sustainability of any rally hinges on fundamental catalysts — fiscal stimulus, property sector stabilization or a turnaround in corporate earnings — none of which have materialized decisively.

For global investors, the signal is twofold. First, Beijing is willing to deploy capital to defend equity valuations, reducing the tail risk of a disorderly selloff. Second, the need for such intervention underscores the underlying weakness in domestic demand and investor confidence. The next key data point is the July 31 official manufacturing PMI, which will show whether the economy is gaining traction entering the second half.

This article is for informational purposes only and does not constitute investment advice.