EL7.AI
Central BanksMedium•1 November 2026•
4 min read

CSI 300 falls 8.5% as China weighs support for share buybacks

Key Facts

1The CSI 300 fell 8.5% in October and recorded 12 consecutive weeks of declines.
2The official manufacturing purchasing managers’ index fell to 49.3 points in October from 50.1 in September, below the 50.0 forecast.
3An expected meeting is set to discuss improving the relending program to fund share buybacks and increases in stakes in companies.
4In September, the People’s Bank of China cut the rate on its one-year pledged supplementary lending facility to 1.5% from 1.75%.

The People’s Bank of China is scheduled to meet with regulators and major banks on Monday to discuss tools to support the stock market, according to a report cited by Chinese media sources and carried by InvestingLive. Discussions are expected to focus on improving the relending program that funds share buybacks and increases in stakes in companies. The report did not include official confirmation of the meeting or its agenda, so talk of potential changes remains attributed to media reports. This comes after the CSI 300, which includes major Shanghai and Shenzhen stocks, fell 8.5% in October. The market report described the month as the worst for Chinese stocks in more than a decade and said the index had posted its 12th consecutive week of declines.

The expected discussion concerns an existing funding mechanism, not a new measure that has already been announced. The report said the talks would cover improving the relending program dedicated to financing share buybacks and investors’ increases in stakes in companies, without specifying additional funding or new terms. The report placed these options in the context of the market decline, but that does not mean the meeting will halt the drop or that participants have made a decision. The report also did not name the regulators or banks involved. The outcome of the meeting and any potential change to the program therefore remain unannounced in the available information.

The decline in shares coincided with activity indicators returning to contraction territory. The official manufacturing purchasing managers’ index registered 49.3 points in October, compared with 50.1 in September, according to National Bureau of Statistics data reported by Reuters. The reading was below the Reuters poll forecast of 50.0 points. A reading below 50 indicates contraction in activity, while the monthly comparison means the index fell from a level above the contraction threshold in September. Reuters said factories faced pressure from weak domestic demand for goods, alongside signs of weakening exports.

Reuters reported that new orders and export orders remained in contraction territory in October, indicating that pressure extended to demand for domestic and foreign production. This is consistent with the agency’s description of weak domestic demand and signs of weaker exports as factors weighing on factory activity. These indicators add economic context to the share losses, without on their own establishing the cause of the index’s move or the effect of any potential support. In September data, the People’s Bank of China had cut the rate on its one-year pledged supplementary lending facility to 1.5% from 1.75%. The government said, according to Xinhua, that the move was intended to encourage policy banks to support the real economy and serve national strategies.

In the same month, China expanded the relending quota for technological innovation by 200 billion yuan to 1.4 trillion yuan, according to the Associated Press. This is a separate support package from the relending program linked to share buybacks, although both measures fall among the financing tools used by the authorities. China set its economic growth target for 2026 at between 4.5% and 5%, and the government said GDP grew 4.7% in the first half of the year. These figures provide background to previous support measures and the expected discussion, but do not determine the size or timing of any measure that may result from the meeting.

China’s RatingDog general manufacturing index is scheduled for release on November 2, according to S&P Global’s calendar. The index was previously known as the Caixin China purchasing managers’ index. The release date follows official October data showing the manufacturing index had fallen to 49.3 points, and a week the market report described as the CSI 300’s 12th consecutive week of declines. Investors will be watching both the next reading and developments related to the meeting, while the media report did not specify when an official announcement about the meeting or its outcomes would be made.