Exchange-traded funds heavily held by China’s so-called “national team” of state-backed investors recorded unprecedented outflows on Thursday, underscoring signs that authorities may be seeking to cool a recent stock market rally.
The Huatai-Pinebridge CSI 300 ETF saw 20.2 billion yuan ($2.9 billion) flow out in a single session — the largest outflow since the fund was launched in 2012 — even as the benchmark CSI 300 index it tracks rose 0.2%. Other major funds linked to the index, including the E Fund CSI 300 ETF and the ChinaAMC CSI 300 ETF, also reported record redemptions.
Market participants often view the trading activity of the national team as a barometer of official policy intentions. The latest outflows suggest efforts to rein in gains fueled by enthusiasm around artificial intelligence and improving corporate earnings expectations.
The selling followed an unexpected move by regulators a day earlier to tighten margin financing rules. While investors largely brushed off the measure as a targeted attempt to curb speculative trading in certain technology stocks, the combination of policy signals has raised questions about how far authorities are willing to allow the rally to run.
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