China's stock market started unfavorably, and fund companies could only "buy over" and become large suckers

The Chinese stock market got off to a bad start in 2025, with the CSI 300 Index big dump 2.9% on the first day of the year, marking its worst performance since 2016. According to Reuters, at least four large mutual funds received calls from the Shanghai and Shenzhen exchanges, requesting them to buy more stocks daily than they sell, effectively prohibiting fund withdrawals and turning them into large suckers.

Note: The CSI 300 Index is composed of the 300 largest and most liquid listed companies on the Shanghai and Shenzhen exchanges, aiming to reflect the overall performance of the A-share market in China.

Tencent and Contemporary Amperex Technology have been included in the U.S. military list

The Pentagon recently blacklisted Tencent Holdings Limited and Contemporary Amperex Technology Co., Ltd. (CATL), and designated several Chinese companies as military entities. Tencent's stock price fell more than 7% in Hong Kong yesterday (1/6), marking its largest drop since October. CATL also experienced a drop of over 5%, its biggest decline in nearly three months.

Being blacklisted could further intensify the tense relationship between the world's two largest economies. While the Pentagon's blacklist does not have specific sanctions, it prevents US companies from doing business with its members.

CATL supplies to Tesla and many of the world's largest automakers, while Tencent has extensive investments or strong connections with game developers such as Epic Games and Activision Blizzard.

2025 started off on the wrong foot, ordering large funds to only 'buy over'

Due to concerns about the incoming US President Trump imposing high tariffs on Chinese goods, which would bring greater pressure to the already sluggish Chinese economy. The Chinese stock market began to plummet in 2025, and within a few trading days this year, the CSI 300 index has already dropped by nearly 4%.

According to Reuters, in the first few days of the year, at least four large mutual funds received calls from the Shanghai and Shenzhen stock exchanges, requesting them to buy more stocks than they sold every day, the so-called 'buying more.' This is because the authorities are trying to calm the market and prevent the stock market from further decline.

According to sources, these funds can sell stocks, but if the total selling value exceeds the purchase value, they will need to increase more long positions as per the guidance of the exchange to fill the gap as soon as possible. Such guidance has become a trend.

Trump is about to take office, and the relationship between China and the United States has become a focus.

There are two weeks left before Trump's second term as the President of the United States. Trump has threatened to impose high tariffs on Chinese goods, causing volatility in the exchange rate of the Renminbi and leading to a decline in Chinese bond yields and stock prices.

Since China announced a large-scale stimulus package at the end of September last year, the stock market surged by 40% at one point, but it has since fallen back and has not broken the previous high. The Chinese government also plans to issue 3 trillion yuan (about 411 billion U.S. dollars) in special national bonds, indicating that Beijing is increasing its fiscal stimulus efforts to boost the sluggish economy.

(Reuters: China plans to issue a record-breaking 3 trillion yuan special government bond next year)

However, while increasing fiscal stimulus, whether a series of measures can truly be transmitted to the daily lives of the general public, currently it seems that there is not much effect from the stock market perspective.

This article starts with a bad start for the Chinese stock market, and fund companies can only 'buy more' and become a large suckers first appeared on Chain News ABMedia.