When Stocks Crash, China Turns to Its ‘National Team’

It rose to prominence when China’s stock market imploded in 2015, spending billions of dollars on equities as the authorities scrambled to stem the losses. Media and market watchers regularly refer to it, but it’s rarely mentioned by Chinese officialdom. There were even questions in 2018 about the desire to keep it going. But worry not, Chinese stockholders, the “national team” is here to (try to) save the day.

It’s a nickname for the collection of state-related bodies that Chinese authorities lean on to buy stocks during times of turbulence. State-owned corporations have been purchasing shares since long before the 2015 crash. But the precipitous fall that year -- the Shanghai Composite Index dropped more than 40% from its peak in the space of 2 1/2 months -- stoked fears about the stability of the financial system itself. That prompted a government-directed splurge on mainland shares, or A shares, as well as the injection of liquidity to some asset management companies. Goldman Sachs Group Inc. estimated the national team held around 3.3 trillion yuan ($519 billion) worth of China A shares as of the third quarter of 2020.