By Patricia Kowsmann

When the Dow Jones Industrial Average crossed 50000 for the first time this month, President Trump celebrated and predicted it would be double that by the end of his term.

In China, officials have had a different reaction to the country's own stock-market boom. A group of state-linked investors has stepped in, unloading holdings to cool things down.

The group is known by market players as the " national team," and it functions as a market stabilization fund. It has been a fixture in the Chinese stock market for more than a decade, usually buying exchange-traded funds, and was widely noted when it intervened to prop up prices during a 2015 crash. After Trump announced his " liberation day" tariffs in April 2025, triggering a global stock selloff, the national team stepped in to relieve the pain as a buyer of index funds.

But the team doesn't just apply a flattering touch-up to sickly markets. It also tones down the glow when investors get too rosy.

"We must resolutely prevent drastic market fluctuations and actively guide long-term and rational investment," Wu Qing, the chairman of the China Securities Regulatory Commission, said in a speech last month.

Chinese stocks have been on a serious bull run.

The CSI 300 benchmark, which tracks shares listed in both Shanghai and Shenzhen, has risen more than 20% over the past year, despite the April dip. Last month, trading volume across mainland Chinese stock exchanges reached a record high. The country's stocks have been performing even better than in the U.S., where the S&P 500 rose 14% over the same period.

Analysts have attributed the rise to enthusiasm about artificial-intelligence breakthroughs in China and a truce in the trade war between the U.S. and China. A handful of companies in AI-connected fields, such as semiconductors and data-center equipment, now sport market capitalizations in the tens of billions of dollars despite having relatively modest profits or none at all.

The Chinese government prefers what analysts call a "slow bull" market. According to Goldman Sachs, domestic China-focused ETFs had outflows of almost $110 billion in the second half of January, suggesting selling by the national team.

"Substantial yet well-paced selling by the national team is curbing -- but not killing -- the positive market momentum," analysts at Morgan Stanley said in a note earlier this month.

Beijing wants to foster a stockholding culture so companies can raise money from private-sector investors and become less reliant on bank loans. It also wants to encourage regular people to consider stock investing to build up assets for retirement.

Stocks account for only 11% of total assets held by households in China compared with 32% in the U.S. Most of the assets held by the Chinese are in the form of property, a market that has been in crisis for years.

At the same time, Chinese officials worry a frenzied rush toward stock investing would result in burst bubbles, big losses and instability. The immediate victims would be individual investors, who account for 60% of daily trading.

So the government is trying to stimulate the market while using the tools to stabilize it when necessary.

There is no official list of who makes up the national team, but a core member is a unit of China's sovereign-wealth fund called Central Huijin Investment. During the April market commotion, a Central Huijin official told reporters that it has played a role in stabilizing markets since 2008 and mentioned the national team by name. Its stockholdings are vast, it has plenty of cash and it can get liquidity support from the People's Bank of China, the official said.

Analysts say another member of the group is China Securities Finance, a margin lender. Some major pension funds, state-backed asset-management companies and brokerages have also been included by analysts in the definition.

As of the third quarter of 2025, the group had around 6 trillion yuan, equivalent to about $870 billion, in exposure to Chinese equities, according to Goldman. That amounted to 6% of the market capitalization of China A-shares, which are stocks denominated in yuan and listed mainly in Shanghai and Shenzhen.

The national team's existence has long turned off some investors who are accustomed to free markets and don't want their stock bets to fail because someone in Chinese officialdom preferred a different direction.

"We would consider investing in China, but given the government interference, the answer is no," said Rui Soares, an investment manager at FAM Frankfurt Asset Management, a German boutique firm with $1.4 billion under management and some investments in Japanese ETFs.

The opposite view was expressed by Xin Wu, founder of Banyan Partners, an investment-management firm specializing in China-related equities. Wu said he focused on picking individual stocks that could beat the market and didn't mind if the national team was buying or selling ETFs tracking broad indexes.

"And really -- what market wouldn't like a slow bull run?" Wu added.

--Zhao Yueling contributed to this article.

Write to Patricia Kowsmann at patricia.kowsmann@wsj.com

(END) Dow Jones Newswires

February 13, 2026 23:00 ET (04:00 GMT)

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