China’s Olympians may be getting the headlines. But the more important force for the nation’s global standing is the “National Team” dominating the mainland stock game.
This gang, also sometimes called the “plunge protection team,” dates back to mid-2015 when the Shanghai Composite Index plunged at double-digit rates.
This collection of state-backed institutional investors arranged by President Xi Jinping’s government emerges from time to time to stabilize share prices. On at least seven occasions since then, it’s raced to the rescue.
For decades, it’s been a maxim among traders that you don’t fight a central bank. In China, speculators know better than to test Beijing’s plunge protection team. All things equal, it’s best not to get in this fire brigade’s way.