Record 128.7 Billion Yuan Flows Into Chinese Funds as AI Trade Fades
Key Facts
A total of 128.7 billion yuan flowed into 9 ETFs known to be active with China’s “National Team” in the week before a Bloomberg report published on October 26, 2026, the largest tally since April 2025. Bloomberg said state funds and brokers bought shares as investors moved away from AI trades. The scale of the inflows points to a strong presence in the market by funds associated with the team during a week when investor positioning shifted. But it does not by itself establish the scale of direct purchases by government entities, since the data concern flows into ETFs in which the team is known to be active. The figures place the move in the broader context of Chinese authorities’ efforts to make market stability a priority.
Inflows into the nine funds approached 140 billion yuan in April 2025, when the U.S.-China trade war put pressure on markets, according to Bloomberg. That makes the level in the week before the October report the highest since that wave of inflows, though still below the tally recorded at the time. In January, the China Securities Regulatory Commission said it would prioritize market stability and preventing sharp volatility among its work objectives for 2026. In March, the commission’s chairman said China would develop market-stabilization mechanisms during the 15th Five-Year Plan, which runs from 2026 to 2030. The statements reflect market stability as an announced regulatory priority, while the fund inflows came as investors moved away from AI trades.
A vice chairman of the China Securities Regulatory Commission said medium- and long-term funds, including social security, pension and insurance funds, had made net purchases of more than 600 billion yuan in Chinese shares since the start of 2026. He added that the market value of their holdings of tradable shares had risen 12.5% since the end of 2025. These figures offer a broader picture of domestic institutional participation in the stock market this year, alongside the weekly inflows into the nine funds. The official said the value of holdings had increased over the same period, while net purchases reflect the amount that entered the market after sales were deducted. Official data did not say whether these purchases were spread across the nine funds covered by the Bloomberg report.
On foreign investment, utilized investment in China totaled 548.81 billion yuan from January to September 2026, down 4.3% year on year, according to the Ministry of Commerce. The decline narrowed from 5.3% in the first eight months after utilized investment rose 2.5% in September alone from the same month a year earlier. China recorded 47,800 newly established foreign-invested companies in the first nine months, down 2.3% year on year. The figures show the cumulative total continued to fall, alongside a slower rate of decline in September, while the number of new companies was below its level a year earlier. The ministry did not provide a forecast for the investment decline.
Investment varied by sector and country of origin. Utilized foreign investment in high-tech industries totaled 228.53 billion yuan from January to September, up 33.8% year on year and accounting for 41.6% of the total. Actual investment from Canada rose 90.5%, from France 31.8%, from Switzerland 26%, from the United States 7.7% and from South Korea 6.8% over the same period, according to the Ministry of Commerce. These rates place growth in high-tech investment against an overall decline, alongside higher inflows from a range of countries. The percentages cover the first nine months of the year and do not mean total foreign investment grew.
For September activity indicators, the official manufacturing purchasing managers’ index was 50.1%, up 0.3 percentage point from the previous month and entering expansion territory, according to the National Bureau of Statistics. The non-manufacturing business activity index was 50.2%, up 1.2 percentage points from August. Within non-manufacturing, construction registered 50.3%, up 3.4 percentage points, while services stood at 50.2%, up 0.9 percentage point. The 50.1% reading was the September manufacturing figure, not a forecast for October. These readings provide the latest official picture of manufacturing and non-manufacturing activity ahead of the next monthly report.
The National Bureau of Statistics scheduled the monthly purchasing managers’ index report for October 31, 2026. The release calendar did not include a forecast for the October reading, so September’s 50.1% figure is not an estimate for the following month. The report will be the next near-term checkpoint for activity indicators after the fund inflows and foreign-investment data for the first nine months. The economic update schedule comes as China’s foreign investment remains lower year on year, despite growth in September and in high-tech industries. Regulators also continue to declare market stability an objective among their priorities for 2026.