In a bold move to stabilise its stock markets amid growing tensions with the United States, Chinese stock exchanges have reportedly imposed daily limits on net share sales by hedge funds and large retail investors. According to four unnamed sources cited by Reuters, the Shanghai and Shenzhen bourses are enforcing a soft cap of 50 million yuan ($6.83 million) in daily net sales per investor.
The restrictions, communicated through verbal warnings by brokerages, come as Beijing intensifies efforts to shield its markets from global volatility triggered by an escalating trade war. Failure to comply with these limits could lead to suspension of trading accounts, two brokerage insiders revealed.
This development follows a series of measures from Chinese authorities aimed at stabilizing the country’s financial markets amid an escalating trade war. Recently, U.S. President Donald Trump raised tariffs on Chinese goods, prompting Beijing to respond with a 125% hike on select American imports.
China’s Central Huijin Investment Ltd., a state-backed entity, has pledged to increase equity holdings. Meanwhile, several listed companies are initiating share buybacks, and major Chinese brokerages are committing to support market stability amid growing economic pressures and fears of a global downturn.
“Such a restriction is understandable as you don’t want to act against state will,” said one brokerage source, as per the news portal.
A notice distributed to brokerages on Thursday, seen by Reuters, outlined the sale restrictions and advised firms to closely monitor trading activity from private funds and large retail clients. It also warned that the current daily net sale cap could be reduced further if market volatility persists.
