① The policy focus has shifted from "stabilizing the market" to "stabilizing expectations," moving from overall macro support to institutional framework building; ② The China Securities Regulatory Commission is promoting the entry of long-term capital into the market through structural reforms, and recently institutions have collectively increased their positions against the trend, injecting momentum into the effort to maintain stability; ③ Whether long-term investors will continue buying on dips, whether share buybacks and cancellations evolve from isolated cases into standard practice, and whether earnings growth can sustain itself into the fourth quarter all remain to be seen.
At the expanded meeting of the CPC Committee of the China Securities Regulatory Commission (CSRC) on October 30, CSRC Chairman Wu Qing explicitly stated that the commission would "make every effort to stabilize the market and market expectations, and continuously enhance the resilience and confidence of the capital market." This regulatory stance continues the tone set in recent years. Just three days after the meeting, a CSRC official again fielded questions from reporters, and on the same day, the People's Bank of China officially announced that it would soon conduct its third SFISF operation, opening applications from institutions starting tomorrow, with more than 30 institutions expressing interest in participating.
Since October, A-shares have been fluctuating and trending lower. What specific measures in this round of policy deployment are worth noting for stabilizing the market and anchoring expectations? Where does this emphasis on "stability" originate? Cailian Press has conducted a review. At present, the regulatory authorities' aim of "stability" is not merely to provide one‑off support at a single point; rather, it involves advances across funding, institutional frameworks, and fundamentals, while also shaping and reinforcing market expectations. Notably, the policy focus has shifted from "stabilizing the market" to "stabilizing expectations," moving from broad‑based bottom‑line support toward building robust mechanisms.
Main theme one: "Stability" drives revenue growth on the investment side, with active ETFs gaining momentum.
On October 23, the first batch of 18 actively managed ETFs began their fundraising period. By November 2, they had collectively raised over RMB 35 billion, with 16 products reaching their individual cap of RMB 2 billion and closing subscriptions—three of these closed on the first day, and more than half completed within three days. Nine asset managers, including J.P. Morgan, E Fund, and Fullgoal, used their own funds and shareholder capital to subscribe to their own products, totaling over RMB 2.7 billion. Going forward, the 18 products will gradually build their positions, injecting nearly RMB 36 billion in additional capital into the market.
Of particular note is the expansion of the product lineup. Recently, the China Securities Regulatory Commission, in coordination with stock exchanges, has refined the review process for new index ETFs, encouraging fund managers to launch more equity index ETFs tracking emerging indices based on factors such as sustainable growth potential, market size, and underlying asset liquidity. It is also exploring the introduction of multi-asset index funds—such as those with fixed equity–bond allocations—to broaden the range of low-to-moderate volatility over-the-counter products. Furthermore, for newly established actively managed equity funds, a performance‑based variable management fee structure is being vigorously promoted, with plans to gradually expand the pool of participating institutions.
These arrangements actually touch on a broader issue in wealth management: the shift of household wealth into equity markets. What often matters less is willingness and more the right vehicle to make that transition. Active ETFs retain the advantages of intraday trading, portfolio transparency, and lower costs, while still allowing fund managers flexibility in stock selection; floating fees align the interests of managers and investors. The goal is not only to attract capital but also to keep it invested.
Main Line Two: Promoting the entry of long-term capital into the market, with institutions collectively increasing positions against the trend, injecting momentum into "stability."
Since September 2024, the China Securities Regulatory Commission, together with the Ministry of Finance, the Ministry of Human Resources and Social Security, the People's Bank of China, and the National Administration of Financial Regulation, has been implementing the guiding opinions and action plans to encourage medium- and long-term capital to enter the market. The real challenge lies not in attracting such capital, but in retaining it.
In July and September 2025, the Ministry of Finance and the Ministry of Human Resources and Social Security respectively issued documents to improve the long-term performance assessment system for insurance funds and annuity funds. These measures include extending the assessment cycle for performance indicators, de-emphasizing quarterly and annual targets, and refining requirements for assessments over three-year or longer periods. Corresponding market access mechanisms were also streamlined: since 2025, the China Securities Regulatory Commission has revised the Measures for the Administration of Securities Issuance and Underwriting, Opinion No. 18 on the Application of Securities and Futures Laws, and Several Provisions on Short-Term Trading Supervision, enabling the National Council for Social Security Fund, annuity funds, insurance funds, and other entities to participate as priority subscribers in IPOs and as strategic investors in private placements by listed companies, while applying short-term trading rules on a product- (or portfolio-) specific basis.
Changes at the data level have already taken place. From early 2025 to the end of September 2026, the assets under management of equity funds grew from RMB 8.6 trillion to RMB 10.3 trillion, an increase of 19.8%; the cap on insurers' equity investment ratio was raised to as high as 50% of total assets; the second and third batches of pilot programs for long-term stock investments by insurers totaled RMB 172 billion; risk factors for long-term holdings of CSI 300, CSI Dividend Low Volatility 100 constituent stocks, and STAR Market common shares were reduced by 10%; and large state-owned insurers allocate 30% of their annual new premium income to A-share investments, with cumulative commitments exceeding RMB 500 billion. Over the past two years, the National Social Security Fund, basic pension funds, annuity funds, and insurance capital have collectively net purchased A-shares worth more than RMB 1.5 trillion.
"The assessment period" is key to understanding this set of data. If performance is still judged solely by annual rankings, long-term investors can only passively reduce their positions amid market volatility; only when the assessment period exceeds the market cycle can contrarian position building become a rational choice. According to a relevant official at the China Securities Regulatory Commission, as market volatility has recently intensified, institutions—including social security funds, pension funds, insurers, public mutual funds, and securities firms—have collectively increased their holdings against the market trend.
Main Line Three: Dual Boosts to Swap Lines and Buyback/Increase‑Holding Loans, with Additional Capital to Safeguard Market Stability
Today, the People's Bank of China announced that it will launch the third tranche of securities, fund, and insurance company swap operations. The policy providing relending for share buybacks and additional share purchases has been transitioned from a temporary measure to a long-term institutional arrangement, with the relending rate reduced to 1%. The China Securities Regulatory Commission, in coordination with the People's Bank of China, will work with relevant market participants to make full and effective use of these two tools, jointly enhancing their role in stabilizing the market and providing support.
First, the scope of participating institutions and the funding limits for the swap‑line facility have been expanded. Following applications from relevant institutions, the China Securities Regulatory Commission (CSRC), in consultation with the People's Bank of China, has approved 31 securities firms and fund management companies to conduct the third batch of swap‑line operations, with requested amounts exceeding RMB 100 billion; these operations commenced recently. The CSRC will continue to urge securities firms and fund management companies to strengthen compliance and risk‑control management, fully leverage their professional investment capabilities, and better stabilize the capital market.
Second, we will expand the coverage of the special relending facility for share buybacks and additional purchases by listed companies. The CSRC will encourage the launch of more landmark cases—such as companies included in major benchmark indices and leading technology stocks—that have significant market influence. At the same time, we will urge listed companies that have disclosed plans to use these loans to accelerate implementation, and those that have already applied for loans to step up their buyback activities, thereby sustaining the current positive momentum in loan-funded buybacks and additional purchases and contributing positively to capital market stability.
According to reports, over the past two years, market participants—including securities firms, fund management companies, and listed companies—have responded enthusiastically, and both tools have been operating smoothly. As of the end of October this year, two rounds of swap‑facility operations have been conducted, with the participation of 28 securities and fund management firms, totaling RMB 105 billion. Across the market, 902 listed companies have disclosed 1,110 announcements for share‑repurchase and increase‑holding loans; together with the increase‑holding loans applied for by the state‑owned capital operation companies China National Investment Holding and China Chengtong, the cumulative ceiling on loan applications has now reached approximately RMB 440 billion.
Main Line Four: Coordinated research on margin trading and short selling indicators is being optimized, with institutional flexibility underpinning "stability."
Margin trading and short selling are among the fundamental institutional pillars of capital markets. They play a positive role in dampening irrational market volatility, facilitating price discovery, attracting medium- and long-term capital into the market, and meeting investors' financing needs. The CSRC has also made relevant arrangements in this regard.
Recently, margin financing balances and trading activity have declined noticeably, with overall leverage levels trending toward greater stability. To stabilize the capital market, boost investor confidence, and enhance the functionality of margin trading and short selling, the China Securities Regulatory Commission, in coordination with stock exchanges, will guide securities firms to conduct comprehensive research on risk control metrics—including margin ratios, haircut rates for securities eligible as collateral, and maintenance margin ratios—aiming to further optimize these parameters while preserving flexibility. On the basis of maintaining overall controllable risks, and in accordance with statutory counter-cyclical adjustment mechanisms, appropriate room for margin expansion will be released to unlock existing funds and improve market liquidity.
According to a relevant official from the China Securities Regulatory Commission, in January 2026, in response to market conditions at the time, the Shanghai, Shenzhen, and Beijing stock exchanges raised the margin ratio for securities financing from 80% to 100%, which played a positive role in mitigating the procyclical buildup of leverage risk, promoting rational trading, and enabling proactive risk prevention.
Investors should continue to adhere to the principles of rational investing and, based on their own risk tolerance, make prudent use of financing instruments. The China Securities Regulatory Commission will continue to urge securities firms to strengthen risk management effectively and safeguard investors' legitimate rights and interests.
Main Line Five: New approaches to "stability," with market-support buybacks proposed to shift from "optional" to "mandatory"
Following the revision of the Rules on Share Repurchases by Listed Companies in December 2023, a normalized repurchase mechanism has been gradually established. From January to October between 2024 and 2026, both the disclosed planned amounts and the actual implementation amounts for share repurchases on the Shanghai and Shenzhen stock exchanges increased by 50% compared with the period from 2021 to 2023. In the first ten months of this year, 645 listed companies announced 700 repurchase plans totaling RMB 237.7 billion, of which RMB 115 billion was earmarked for cancellation, accounting for nearly 50%; 747 companies actually executed repurchases worth RMB 134.5 billion. The planned amount, actual amount, cancellation amount, and their respective proportions all reached record highs.
On this basis, the CSRC plans to make four adjustments to market-support buybacks "necessary to safeguard the company's value and shareholders' rights":
First, a new scenario of "below‑issue price" stock performance has been added; the market‑stabilization repurchase is no longer subject to the restriction that "the company's shares have been listed for at least six months," and the prohibition on placing orders during the opening and closing call auction phases has been lifted. Second, if a company within 36 months of listing triggers a market‑stabilization condition, it must strictly fulfill the share‑price stabilization measures set out in its listing commitments. Third, companies with funds raised in excess of their target must implement repurchases promptly. Fourth, annual cash dividend plans are required to specify that a certain proportion of funds be allocated to a dedicated repurchase fund; proceeds from the centralized bidding sale of shares repurchased under market‑stabilization programs shall also be channeled into this fund.
These four optimizations and adjustments demonstrate a shift, moving market‑stabilizing buybacks from being a discretionary option to an obligation that should be fulfilled. In particular, combining a dedicated buyback fund with cancellation‑type buybacks directly boosts earnings per share and delivers greater shareholder returns than using repurchased shares for incentive programs. Pending formal rule amendments, regulators will encourage companies whose stocks are constituents of major indices, as well as leading technology firms, to implement these measures on a pilot basis.
Cailian Press noted that this echoes remarks made by CSRC Chairman Wu Qing at the Financial Street Forum, who disclosed that "dividends and share buybacks totaled 2.1 trillion yuan this year, 2.7 times the combined amount of IPO and secondary‑offering financing during the same period," indicating that the balance between investment and financing is shifting from the funding side to the returns side.
Theme Six: Fundamentals Provide a Valuation Anchor for "Stability," with Q3 Earnings Reaching New Highs
Ultimately, stabilizing market expectations hinges on corporate profitability. As of October 31, 5,224 listed companies on the Shanghai and Shenzhen stock exchanges had disclosed their Q3 reports. In the first three quarters, total operating revenue reached RMB 56.6 trillion, and net profit stood at RMB 5.1 trillion, up 5.8% and 8.5% year over year, respectively—both the scale and growth rate hitting new highs since 2022. Earnings were reported by 73% of the companies, with a trailing twelve-month return on equity (ROE) of 7.9%.
Structurally, net profits on the Shanghai and Shenzhen main boards increased year over year by 1.1% and 18.0%, respectively, while those on the STAR Market and the ChiNext Board rose by 474.6% and 22.7%, respectively. For real‑economy listed companies, operating revenue totaled RMB 49.3 trillion and net profit reached RMB 2.8 trillion, up 6.7% and 18.3% year over year, outpacing the growth rates of all listed companies.
Among these, AI-related sectors—electronics, computers, telecommunications, and pharmaceuticals/biotechnology—collectively boosted overall listed companies' profit growth by 6.6 percentage points; net profits in the AI sector surged 281.0%, while optical modules, PCBs, and memory grew by 121.9%, 108.9%, and 321.8%, respectively. Among upstream energy and resource commodities, petroleum & petrochemicals and basic chemicals saw net profit increases of 32.9% and 27.2%, coal rose 27.6%, and nonferrous metals jumped 87.9%, together contributing 5.9 percentage points to overall growth. On the export front, exports grew 21.3% in the first three quarters, with net profits in electronics and power equipment rising 188.2% and 16.1%, respectively; semiconductors, components, and consumer electronics posted gains of 652.3%, 98.3%, and 36.9%, respectively.
The significance of improving profitability is that it provides a valuation anchor for "stability." Policy can shift risk appetite, but only earnings can move the pricing center.