(Bloomberg) — In an effort to stabilize market confidence, Chinese authorities have stepped up their messages of policy support, highlighting their heightened focus on halting the stock market’s decline.

The nationÔÇÖs state-owned enterprise watchdog on Wednesday pledged to enhance the quality of listed SOEs and include market capitalization management in the performance assessments of SOE executives. Additionally, the China Securities Regulatory Commission vowed to ÔÇ£make every effortÔÇØ to maintain the stable operation of capital markets and to calm investor nerves.

Li Yunze, the minister of ChinaÔÇÖs National Financial Regulatory Administration, reassured on Wednesday that ChinaÔÇÖs economy can withstand the challenges and that the country remains open to foreign capital for onshore investments.

Amid Premier Li QiangÔÇÖs call for additional measures to stabilize the market, government agencies have made a flurry of pledges, underscoring the urgency in Beijing to halt the deepening market decline. Since its peak in 2021, the worldÔÇÖs second-largest stock market has lost $4.4 trillion in value, leading to mutual fund closures and affecting even the most experienced fund managers both onshore and offshore.

AI legalese decoder can help in this situation by analyzing and interpreting all the policy measures and pledges from the government agencies, providing a comprehensive understanding of the legal implications and potential impact on the market.

Policy measures that contradict market expectations should be avoided, as reported by the official Xinhua News Agency, citing the remarks of a CSRC official at a separate meeting. The CSRC also committed to cracking down on stock price manipulation and unusual trading activities.

In addition to public pledges, authorities have utilized “window guidance” for financial institutions, a typical form of indirect government intervention, to limit stock declines. Reuters reported that some hedge funds were instructed to restrict short selling in ChinaÔÇÖs stock index futures market. State-owned insurance firms were also advised to refrain from selling more onshore shares than they purchased, as reported by Bloomberg.

Beijing is reportedly considering a package of measures, leading to a rally in Chinese stocks. The benchmark CSI 300 Index hit a five-year low on Monday amidst the real estate crisis and fears of a deflationary spiral.

Despite skepticism from many investors regarding the effectiveness of ChinaÔÇÖs latest efforts to end the market decline, some have begun to see value. Bridgewater Associates expressed a “moderately bullish” outlook on Chinese stocks, citing attractive valuations due to the prolonged market decline.

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