Beijing has made clear its desire to build bigger financial institutions to help its already state-dominated financial sector navigate economic and market turmoil. Central Huijin, with both its direct buying and vast portfolio of firms, is a key component of this initiative.<\/p>\n
During the escalation of the trade war with the US in April, Central Huijin openly pledged<\/a> to support markets and, for the first time, described itself <\/a>in a statement as a member of the \u201cnational team\u201d of prominent state-backed investors in the country\u2019s markets.<\/p>\n \u201cCentral Huijin is obviously being asked to play a big role,\u201d said George Magnus, a research associate at Oxford university\u2019s China Centre.<\/p>\n <\/p>\n \u201cIt will be called upon more and more to intervene in the financial sector and the stock market as China adapts to the reality of higher non-performing loans, tighter credit conditions, and weaker asset prices,\u201d he added.<\/p>\n Central Huijin is also a crucial tool as the government reshapes a sprawling financial sector that remains largely closed off from the outside world.<\/p>\n \u201cHuijin is becoming a strategic co-ordinator,\u201d said one Beijing-based policy adviser. \u201cIt\u2019s a convenient tool for the state to lever when it needs to tighten its grip on vital financial resources.\u201d<\/p>\n Since its launch in 2003, the fund has historically acted as the government\u2019s lender of last resort in opaque rescues of regional banks.\u00a0It also holds controlling or strategic stakes in major lenders, such as ICBC and China Everbright, as well as the troubled insurance units spun off from Anbang, a Chinese financial conglomerate that entered bankruptcy proceedings in 2024 after years of struggling with insolvency.<\/p>\n <\/p>\n The fund became a fully-owned subsidiary of China\u2019s sovereign wealth fund, China Investment Corporation, in 2007.<\/p>\n Following a sweeping leadership reshuffle and last September\u2019s stimulus move, the fund has significantly broadened its portfolio, going deeper into ETFs and expanding across the financial system.<\/p>\n It is now led by Zhang Qingsong, 59, a former central banker with three decades of experience in China\u2019s financial system. He also held senior management posts at lenders such as Agricultural Bank of China and Bank of China, which gave him deep familiarity with Huijin\u2019s expansive portfolio.<\/p>\n In February, the Ministry of Finance transferred its controlling stakes in China\u2019s three largest bad-debt managers \u2014 Cinda, Orient and Great Wall \u2014 to Huijin, at no cost.\u00a0<\/p>\n Its total assets under management amount to $1.1tn as of June 2024, according to company filings, but it also has stakes in a portfolio of state financial institutions with total assets of at least $29tn, according to Financial Times calculations \u2014 a huge proportion of the country\u2019s entire financial assets. <\/p>\n Huijin did not respond to a request for comment. <\/p>\n Although April was the first time Huijin had publicly declared itself as playing in the position of state intervention fund in the \u201cnational team\u201d \u2014 or in the language of China\u2019s market regulator, as a \u201cquasi-stabilisation fund\u201d \u2014 it has acted similarly in the past to help set a floor for China\u2019s stock market during times of distress.\u00a0<\/p>\n It previously played the same role propping up shares during the market rout of 2015<\/a>, investing an estimated Rmb1.2tn in more than 900 companies to prevent a meltdown.\u00a0It has exited many of those holdings since 2021, though it still held stakes in 165 listed companies as of the first quarter of 2025, according to the Wind financial data service.<\/p>\n <\/p>\n But from early 2024, its focus shifted to increasing its holdings of exchange traded funds tracking major indices, which avoided issues arising from single-stock purchases. <\/p>\n The buying intensified in April following Donald Trump\u2019s \u201cliberation day\u201d tariffs, when Huijin pledged to step up ETF purchases \u201cwhen necessary.\u201d An estimate from a Shanghai-based analyst not allowed to publicly speak on the matter suggests ETF purchases by Huijin in April alone may have reached Rmb200bn.\u00a0<\/p>\n Huijin\u2019s expanded role this year has been helped by broader co-ordinated moves from other regulators, with significant support from the People\u2019s Bank of China. As China seeks to\u00a0consolidate its financial sector<\/a>, Huijin can help facilitate mergers and expedite approval times.<\/p>\n Its activity has also coincided with an official push for higher dividends in China, while a decline in mutual fund fees is expected to reduce its costs.<\/p>\n A senior executive at a Beijing fund house said that it was hard for managers to keep fees at previous, higher levels, given the \u201cgiant\u201d inflows from Huijin.<\/p>\n Recommended<\/p>\n<\/a><\/p>\n
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