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 trade 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 financial system.
Beijing has made clear its need 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 battle with the US in April, Central Huijin overtly pledged to help markets and, for the primary time, described itself in a press release as a member of the “nationwide crew” of distinguished state-backed traders within the nation’s markets.
“Central Huijin is clearly being requested to play a giant position,” mentioned George Magnus, a analysis affiliate at Oxford college’s China Centre.
“It is going to be known as upon an increasing number of to intervene within the monetary sector and the inventory market as China adapts to the fact of upper non-performing loans, tighter credit score situations, and weaker asset costs,” he added.
Central Huijin can also be an important device as the federal government reshapes a sprawling monetary sector that is still largely closed off from the surface world.
“Huijin is changing into a strategic co-ordinator,” mentioned one Beijing-based coverage adviser. “It’s a handy device for the state to lever when it must tighten its grip on important monetary sources.”
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, corresponding to ICBC and China Everbright, in addition to the troubled insurance coverage models spun off from Anbang, a Chinese language monetary conglomerate that entered chapter proceedings in 2024 after years of scuffling with insolvency.
The fund turned 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 many years of expertise in China’s monetary system. He additionally held senior administration posts at lenders corresponding to 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, for gratis.
Its complete property below administration quantity to $1.1tn as of June 2024, in line with firm filings, nevertheless it additionally has stakes in a portfolio of state monetary establishments with complete property of at the least $29tn, in line with Monetary Instances calculations — an enormous proportion of the nation’s whole monetary property.
Huijin didn’t reply to a request for remark.
Though April was the primary time Huijin had publicly declared itself as taking part in within the place of state intervention fund within the “nationwide crew” — 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 occasions of misery.
It beforehand performed the identical position propping up shares through the market rout of 2015, investing an estimated Rmb1.2tn in additional than 900 corporations to forestall a meltdown. It has exited a lot of these holdings since 2021, although it nonetheless held stakes in 165 listed corporations as of the primary quarter of 2025, in line with the Wind monetary knowledge service.
However from early 2024, its focus shifted to rising its holdings of trade 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 obligatory.” An estimate from a Shanghai-based analyst not allowed to publicly converse on the matter suggests ETF purchases by Huijin in April alone might have reached Rmb200bn.
Huijin’s expanded position this 12 months has been helped by broader co-ordinated strikes from different regulators, with vital help from the Individuals’s Financial institution of China. As China seeks to consolidate its monetary sector, Huijin might help facilitate mergers and expedite approval occasions.
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 mentioned that it was exhausting for managers to maintain charges at earlier, larger ranges, given the “big” inflows from Huijin.
Many analysts anticipate that an intervention fund corresponding to Central Huijin’s would finally exit the market after holding positions for a number of years, however this might take longer than regular, given the scale 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 steered Huijin and the authorities could also be keen to carry positions for “20, 30, even 40 years”.
“I don’t see any near-term threat of the nationwide crew exiting the market or coverage turning detrimental,” he mentioned. “It’s not the story in the mean time.”
