From recapitalising rural banks to propping up the inventory market, Central Huijin, an arm of China’s sovereign wealth fund, has supported the nation’s monetary system since its launch 20 years in the past. However over the previous 12 months, the dimensions of its interventions has thrust it into the highlight.
Central Huijin’s holdings of exchange traded funds soared previous Rmb1tn ($140bn) in 2024, a seven-fold improve 12 months on 12 months, as the federal government ordered stimulus measures geared toward boosting the economic system.
Beijing has made clear its want to construct greater monetary establishments to assist its already state-dominated monetary sector navigate financial and market turmoil. Central Huijin, with each its direct shopping for and huge portfolio of corporations, is a key part of this initiative.
Through the escalation of the commerce conflict with the US in April, Central Huijin openly pledged to help markets and, for the primary time, described itself in a press release as a member of the “nationwide staff” of distinguished state-backed traders within the nation’s markets.
“Central Huijin is clearly being requested to play a giant position,” stated George Magnus, a analysis affiliate at Oxford college’s China Centre.
“It is going to be referred to as upon increasingly more to intervene within the monetary sector and the inventory market as China adapts to the truth of upper non-performing loans, tighter credit score circumstances, and weaker asset costs,” he added.
Central Huijin can also be an important instrument as the federal government reshapes a sprawling monetary sector that continues to be largely closed off from the surface world.
“Huijin is turning into a strategic co-ordinator,” stated one Beijing-based coverage adviser. “It’s a handy instrument for the state to lever when it must tighten its grip on important monetary assets.”
Since its launch in 2003, the fund has traditionally acted as the federal government’s lender of final resort in opaque rescues of regional banks. It additionally holds controlling or strategic stakes in main lenders, resembling ICBC and China Everbright, in addition to the troubled insurance coverage items spun off from Anbang, a Chinese language monetary conglomerate that entered chapter proceedings in 2024 after years of fighting insolvency.
The fund grew to become a fully-owned subsidiary of China’s sovereign wealth fund, China Funding Company, in 2007.
Following a sweeping management reshuffle and final September’s stimulus transfer, the fund has considerably broadened its portfolio, going deeper into ETFs and increasing throughout the monetary system.
It’s now led by Zhang Qingsong, 59, a former central banker with three a long time of expertise in China’s monetary system. He additionally held senior administration posts at lenders resembling Agricultural Financial institution of China and Financial institution of China, which gave him deep familiarity with Huijin’s expansive portfolio.
In February, the Ministry of Finance transferred its controlling stakes in China’s three largest bad-debt managers — Cinda, Orient and Nice Wall — to Huijin, without charge.
Its whole belongings underneath administration quantity to $1.1tn as of June 2024, based on firm filings, however it additionally has stakes in a portfolio of state monetary establishments with whole belongings of at the least $29tn, based on Monetary Instances calculations — an enormous proportion of the nation’s total monetary belongings.
Huijin didn’t reply to a request for remark.
Though April was the primary time Huijin had publicly declared itself as enjoying within the place of state intervention fund within the “nationwide staff” — or within the language of China’s market regulator, as a “quasi-stabilisation fund” — it has acted equally prior to now to assist set a flooring for China’s inventory market throughout instances of misery.
It beforehand performed the identical position propping up shares throughout the market rout of 2015, investing an estimated Rmb1.2tn in additional than 900 firms to stop a meltdown. It has exited lots of these holdings since 2021, although it nonetheless held stakes in 165 listed firms as of the primary quarter of 2025, based on the Wind monetary knowledge service.
However from early 2024, its focus shifted to growing its holdings of alternate traded funds monitoring main indices, which averted points arising from single-stock purchases.
The shopping for intensified in April following Donald Trump’s “liberation day” tariffs, when Huijin pledged to step up ETF purchases “when crucial.” An estimate from a Shanghai-based analyst not allowed to publicly converse on the matter suggests ETF purchases by Huijin in April alone could have reached Rmb200bn.
Huijin’s expanded position this 12 months has been helped by broader co-ordinated strikes from different regulators, with important help from the Individuals’s Financial institution of China. As China seeks to consolidate its financial sector, Huijin will help facilitate mergers and expedite approval instances.
Its exercise has additionally coincided with an official push for larger dividends in China, whereas a decline in mutual fund charges is predicted to cut back its prices.
A senior govt at a Beijing fund home stated that it was onerous for managers to maintain charges at earlier, larger ranges, given the “big” inflows from Huijin.
Many analysts anticipate that an intervention fund resembling Central Huijin’s would finally exit the market after holding positions for a number of years, however this might take longer than ordinary, given the dimensions of purchases this time.
And, with the mainland’s A-share markets now carrying extra strategic weight than they did a decade in the past, and valuations nonetheless at low ranges, the Shanghai-based analyst advised Huijin and the authorities could also be keen to carry positions for “20, 30, even 40 years”.
“I don’t see any near-term danger of the nationwide staff exiting the market or coverage turning destructive,” he stated. “It isn’t the story for the time being.”
