Nine ETFs Tied to China's 'National Team' Took In 128.7 Billion Yuan Last Week, Most Since April 2025

Since China's blue-chip index slid into a bear market in the second half of October, the country's state-linked funds have shifted from hesitation to heavy buying. Last week, nine exchange-traded funds known to be actively traded by the so-called national team took in 128.7 billion yuan ($19 billion), according to data compiled by Bloomberg.

That is the largest weekly total since April 2025, when inflows reached nearly 140 billion yuan during the market rout set off by President Trump's tariffs. Beijing responded to that rout with a series of measures to prop up sentiment.

Thursday's wipeout, Friday's rebound

The heaviest buying followed a brutal Thursday, Oct. 22. Market commentary from China Last Night said the national team held back until the final hour of trading that day, which it called too little, too late. Hong Kong indexes broke through round-number levels, that note said, triggering stop-loss selling into thin buying.

On Friday, Oct. 23, the Shanghai Composite opened down 2.29%, the Shenzhen Component down 3.38% and the STAR Board down 3.72%. In the late morning, buying in the favored ETFs began.

The CSI 300 closed up 1.7% at 4,105.33, reversing an intraday drop of as much as 2%. The CSI 300 ETF run by E Fund Management turned over 19.5 billion yuan ($2.9 billion), its busiest day since Oct. 9, 2024, according to the South China Morning Post. That paper said the surge suggested Central Huijin Investment and other state-backed funds may have stepped in.

No agency has said so. China Last Night put inflows into two of the favored ETFs at $1.56 billion and $1.42 billion on Friday. AI supply-chain names such as semiconductors and equipment led the bounce, along with the STAR Board and the Hang Seng Tech Index.

A pattern with a track record

This is not the first time this month. On Oct. 9, the CSI 300 turned a 1.6% intraday slide into a 0.2% gain by the close, and the Star 50 erased a drop of nearly 5%. Turnover in eight ETFs often tied to the national team approached 30 billion yuan ($4.5 billion), a near two-month high.

No trigger was confirmed that day. Traders pointed to unverified online posts about regulatory "window guidance" to curb sell orders. Fu Zhifeng, chief investment officer at Shanghai Chengzhou Investment Management, said he had heard that market chatter but "haven't heard any confirmation from companies yet."

Hong Kong-based Lotus Asset Management chief investment officer Hao Hong has described the support as a signal read from the charts.

The same analysis noted that a set of targeted measures in late September fell short of the all-in stimulus Beijing used in earlier sell-offs.

Strong economy, weak stocks

The sell-off sits oddly against the economic data. China's third-quarter GDP grew 4.5% year over year, ahead of the 4.4% economists expected and up from the second quarter. September exports rose 36.3% in dollar terms. High-tech manufacturing expanded 14.3%, nearly triple the pace of broader industrial output, according to a Caixin Global commentary.

The China Passenger Car Association said September auto exports rose 55% year over year to 1.2 million vehicles. Year-to-date exports are up 52%, at 8.6 million units.

Yet equities fell hard over two weeks. China Last Night tied the slide partly to a global sell-off in AI supply-chain stocks.

That note added that China's positioning in AI names was not as extreme as in Taiwan, where MSCI Taiwan is about 50% TSMC. It said MSCI Korea is about 50% SK Hynix and Samsung. In its view, that could allow a broadening out to non-AI sectors.

Can ETF buying hold a floor?

The Caixin commentary argues that stabilizing Chinese stocks "will take more than ETF buying." Its case rests on the gap between solid aggregate data and falling share prices. Elsewhere in Caixin's coverage, a related headline flags rising sales alongside falling profits across the A-share market, pointing to margin strain.

Newsquawk's market note adds a caution on the data itself. The inflows are reported, not officially confirmed, and ETF subscription data is an imperfect way to attribute buying to the state.

That note says that in past rounds, state-linked buying has stabilized the large-cap benchmark first. Smaller indices and offshore listings have lagged. It says the price effect has tended to be strong while the flows persist and to fade when they stop.

The pass-through to Hong Kong has been thinner. On Friday, Mainland investors sold Hong Kong-listed stocks and ETFs through Southbound Stock Connect even as the Hong Kong market ground higher.

The open question is the next round of data. Taiwan's market is closed Monday for a holiday. Whether the national team keeps buying through the coming weeks will show whether last week's 128.7 billion yuan was a one-week defense or the start of a longer campaign. The other thing to watch is whether other state actors, such as insurers and pension funds, join in.