Chinese regulators have advised banks to temporarily curb initial public offerings and large equity placements in an effort to stabilize the stock market, the Financial Times reports. The measure follows an unsuccessful attempt by state funds to halt the sell‑off through direct purchases of local shares.
On October 26, Nikkei and Bloomberg reported that state‑backed funds, acting on government instructions, had begun buying stakes in domestic companies. Those interventions failed to reverse the negative trend. Regulators have now proposed that banks delay new listings and large securities deals to reduce selling pressure on the market.
Mainland China’s CSI 300 index lost about 8.5% in October, marking its worst monthly performance in a decade. Year‑to‑date, its decline is roughly 14%. The extended slump has persisted since the summer as macroeconomic headwinds mount and investor scepticism toward AI‑related investments intensifies. An additional drag came from tax measures targeting offshore trusts, which prompted some investors to liquidate holdings to meet tax liabilities.
Capital Economics Asia-Pacific markets head Thomas Mathews warns that administrative fixes will not deliver a durable recovery without addressing deeper structural problems. He says Beijing needs to accelerate corporate profit growth, a task that will likely require fiscal or monetary support. According to Fu Zhifeng, the chief investment officer at Shanghai Chengzhou Investment Management, the speed of the decline points to further downside risk. He singles out weak domestic demand, heavy AI spending, and high government bond yields in the United States and Europe as key threats to any recovery.
