Beijing Is Now Pushing Buybacks and Blocking IPOs to Prop Up Stocks

Quick Read

• Beijing’s buyback loans became permanent as FXI and KWEB barely moved, slipping 0.05% and 0.26% respectively, with neither tied directly to the news.

• China’s CSI 300 dropped 8.5% in October, its worst month in over a decade, while the STAR 50 tech index cratered roughly 40% from its midyear peak.

• Hirson and Song wrote they regard the measures as intended to “put a floor under markets” but are “skeptical” authorities will engineer a broad-based rebound.

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On Monday, November 2, 2026, the Shanghai Composite rose 1.1% after China’s central bank made cheap stock buyback loans a permanent tool. On Tuesday, November 3, 2026, the index fell 0.8% to near its lowest level in a year.

Beijing is working to support share prices from two directions. The People’s Bank of China is adding demand by funding buybacks. The securities regulator reportedly told banks to pause new listings, which would cut the supply of new shares.

It came through “window guidance,” meaning unwritten instructions that regulators give banks in private meetings. Regulators did not comment, and no rule was published.

For US investors, the real question is whether a policy floor is reason enough to own Chinese stocks through the iShares China Large-Cap ETF (NYSEARCA:FXI) or the KraneShares CSI China Internet ETF (NYSEARCA:KWEB). Both barely moved Tuesday. FXI slipped 0.05%, and KWEB fell 0.26%, and nothing ties either move to the news.

What Beijing Actually Put in Writing

The central bank made the firm commitment. It cut the rate on its buyback relending facility from 1.25% and made the facility permanent. Banks receive 100% low-cost funding on one-year renewable terms, then lend to companies at “a reasonable markup,” so borrowers pay more than the base rate.

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The facility is open to 21 national banks and five major regional banks. Bank quota applications came in at more than 200 billion yuan against an initial quota of 300 billion yuan. Planned company borrowing, which is a separate measure, reached nearly 270 billion yuan.