Chinese companies are buying back shares from the Chinese government, in a bid to shore up its foreign and domestic assets.
The moves, which are being reported by state media and in comments by Chinese leaders, could mark a new chapter in China’s investment strategy, which includes buying back foreign and foreign assets in a move that is expected to add to the countrys stock market woes.
China has been pushing for foreign and local investors to step up their buying of stocks in an attempt to prop up the country’s economy.
It’s unclear how much the buyback will benefit the economy.
The share market has been in freefall in the wake of the government’s massive bond-buying spree in 2015.
It has been one of the most expensive periods for the Chinese stock market since at least 2000.
On Monday, the Shanghai Composite Index fell 1.7% in after-hours trading as the government announced a new round of bond-backed loans worth about 6.7 trillion yuan ($1.9 trillion).
The government announced another round of bonds worth more than 6.6 trillion yuan and has also bought more than 10 trillion yuan in foreign debt.
In a statement, the Securities and Exchange Commission said the purchases are expected to boost the economy’s long-term growth and spur private investment.
It said the new bond-funding scheme will be expanded in 2020.
The move will bolster the governments confidence in the market, which it has been trying to maintain, the agency said.
The Shanghai Composite fell 1% in trading on Monday, its worst daily performance since January.
China is still a big buyer of Chinese shares, but its stock market is slowing sharply as the country tries to reduce its massive debt load.
On Tuesday, China’s top stock index fell for the third day in a row as investors sought more safe havens for their money.
The market was already on a downward spiral as investors turned to safe havens such as Hong Kong, Singapore and the United States, where the government has imposed limits on foreign ownership.
“The Shanghai Stock Exchange has lost momentum, with its share prices declining nearly 5% in the last month,” Li Heping, the chief executive of Shanghai-based brokerage IGX Securities, said in a note on Monday.