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Beijing is reaching for its stock-market toolkit again. China’s central bank, its banking regulator and its securities regulator were set to sit down with the country’s biggest banks on Monday, November 2, to study how to make a central-bank-funded lending program for share buybacks work harder, after October handed Chinese equities their worst month in more than a decade. A second meeting the same day was expected to bring brokers and fund managers to the People’s Bank of China to talk about putting existing market-support tools to greater use.
No new measures had been announced as of Sunday evening U.S. time, and officials have not confirmed the agenda. But the timing, the guest list and a string of signals from regulators over the past week suggest Beijing is preparing another attempt to put a floor under a market that last month’s steps failed to steady.
What Was Scheduled for Monday
According to financial outlet Cailian and the state-owned Shanghai Securities News, as reported by the South China Morning Post and investingLive, the PBOC, the National Financial Regulatory Administration and the China Securities Regulatory Commission (CSRC) planned to meet leading banks to look at “optimizing” the relending facility for stock repurchases and stake increases. That program lets banks lend to listed companies and their major shareholders so they can buy shares, with the central bank refinancing those loans.
Yicai separately reported that the PBOC and CSRC would meet selected securities firms and fund managers at the central bank around 9 a.m. Beijing time on the same day, according to summaries from Asia Daily and BigGo Finance. Two capital-market meetings at the central bank on one day is unusual, and the 21st Century Business Herald noted that people in the industry read the sessions as groundwork for further stabilization steps.
How Bad October Was
The numbers explain the urgency. The CSI 300 index of major Shanghai and Shenzhen stocks fell 8.5% in October, slipping into a bear market and posting a record 12th consecutive weekly decline, investingLive reported, citing Bloomberg. The Shanghai Composite closed at 3,599.02 on October 30, down 6.33% for the month and below the 3,600 mark. The damage was far worse in growth stocks: the Shenzhen Component dropped 15.94%, and both the ChiNext and STAR Composite indexes lost more than 20%, according to Asia Daily.
The economy offered little cover. Official purchasing managers’ indexes released Saturday showed both manufacturing and services back in contraction in October, at 49.3 and 49.7 respectively. Global sentiment did not help either: on October 30 the Nasdaq Composite fell 2.86% and the Philadelphia Semiconductor Index dropped 7.2% as doubts about AI spending spread across markets.
The Tools on the Table
Both instruments under discussion date to September 2024, when PBOC Governor Pan Gongsheng unveiled them. One is a swap facility that lets securities firms, funds and insurers pledge assets to the central bank for liquidity they can use to buy stocks. The other is the buyback relending program, which started with a 300 billion yuan ceiling and a 1.75% central-bank rate. In May 2025 the two quotas were pooled into a combined 800 billion yuan, roughly $120 billion.
Regulators have already loosened the terms several times. The maximum loan term was stretched from one year to three, the share of a buyer’s own money required was cut from 30% to 10%, banks were encouraged to lend on corporate creditworthiness rather than collateral, and state capital operating platforms became eligible borrowers.
Usage has been meaningful but well short of the ceiling. More than 300 A-share companies announced buyback or stake-increase loans in the first ten months of 2026, with announced maximums totaling about 78.1 billion yuan, according to a Wind data compilation cited by Asia Daily. Haier Smart Home’s special loan reached 5 billion yuan, and BOE Technology lined up two loans totaling 5.9 billion yuan.
The bigger potential lever is state money. A large state-owned bank is reportedly planning new buyback-loan lines of up to 100 billion yuan each for state investment groups China Reform Holdings and China Chengtong, about 200 billion yuan in total, according to RTHK and BigGo Finance. A credit line is capacity, not a purchase; how much is actually drawn and spent on shares is what will matter.
A Broader Policy Push
The meetings land alongside other moves. At an expanded party committee meeting on October 30, chaired by CSRC Chairman Wu Qing, the securities regulator pledged to stabilize the market and expectations. The same day, the PBOC said that starting November 2 it would run overnight reverse repurchase operations every working day at a fixed 1.25% rate, making the overnight rate its main policy benchmark for short-term money.
There is also a fundamentals argument Beijing can point to. By October 31, 5,224 companies listed in Shanghai and Shenzhen had reported nine-month results showing combined net profit of 5.1 trillion yuan, up 8.5% from a year earlier, Asia Daily reported. GF Securities strategist Liu Chenming has attributed the selloff mainly to sentiment and funding pressure rather than a turn in corporate earnings.
Why It Matters for Business Readers
Signals are no longer enough. Last month’s measures did not stop the slide, so markets will judge Monday’s outcome on scale and terms: a bigger quota, cheaper refinancing, longer tenors or broader eligibility would read as real firepower, while incremental tweaks risk a repeat of October. The first test comes as mainland and Hong Kong markets open Monday.
State buyers are becoming the backstop. If the 200 billion yuan in reported credit lines for China Reform and China Chengtong materializes, it would push more of the market’s support onto state balance sheets. That can cushion prices in the short run, but it also blurs price discovery for foreign investors trying to value Chinese assets.
The spillover is global. A credible package could ease pressure on the yuan and lift broader Asian risk appetite, according to investingLive’s analysis. For companies that sell into China, source from it or hold Chinese equities in their treasury or pension portfolios, Beijing’s response is a near-term variable worth tracking alongside U.S. earnings and the Fed.
Buybacks as policy are a two-edged tool. Encouraging companies to borrow to buy their own shares can support valuations, but it also adds leverage to corporate balance sheets at a time when manufacturing activity is contracting. Investors should watch whether borrowed buybacks come from firms with the cash flow to carry the debt.
The Bottom Line
China is lining up banks, brokers and state investors behind its equity market after a record losing streak, with an 800 billion yuan toolkit and as much as 200 billion yuan in new state credit lines reportedly in play. Whether that turns sentiment will depend on details that had not been released as of Sunday night. Until Beijing shows the size and speed of its response, the combination of contracting activity and global AI jitters keeps the downside case alive.
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Edited by Coron @QUE.COM
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