China’s Stock Market Set to Skyrocket: 2 Trillion Yuan Fund Could Boost Stability and Growth, Says Government-Affiliated Think Tank

China's stock market may instantly benefit from a 2 trillion yuan fund, according to a think tank. The Institute of Finance and Banking, part of the Chinese Academy of Social Sciences, has suggested that this fund could increase the capital market's stability and encourage consistent growth.

A research institute linked to the government suggested on Tuesday that China ought to release 2 trillion yuan (equivalent to US$280 billion) in unique bonds to create a fund aimed at stabilizing the stock market. This proposal comes as part of a wider initiative by the government to strengthen the economy.

The Institute of Finance and Banking under the Chinese Academy of Social Sciences reported that the fund aims to boost the intrinsic stability of the capital market and foster consistent economic expansion.

The recommendation to buy blue-chip stocks and exchange-traded funds comes at a time when the stock market is seen as a significant indicator of market sentiment. It's also being used to regain trust, particularly for the over 200 million individual investors participating in the A-share market.

"The rapid reaction of the stock market to policy advantages allows for the easier gathering of additional funding from personal savings, bank wealth management, and overseas capital, thereby immediately enhancing market morale," said the governmental research group based in Beijing.

Nonetheless, China's stock market has experienced drastic fluctuations in the previous month, as the government has aggressively pursued a wide array of stimulus strategies in an attempt to rejuvenate the economy.