The Chinese authorities are reportedly considering measures to stabilise the country's stock market following Premier Li Qiang’s call to support the development of capital markets during the state council meeting.

These measures include setting up a 2 trillion Chinese renminbi ($279.81 billion) stabilisation fund to invest in A shares through northbound trading, injecting 300 billion Chinese renminbi into the domestic market through state-owned firms, and supporting the currency exchange rate. These measures, however, have yet to be finalised. The domestic CSI 300 index was still down 0.5 per cent in the morning trading session on Wednesday, bringing the year-to-date loss to 6.2 per cent. 

“If the plan materialises, this would be the eighth time since 2008 that China’s “national team” enters the A-share market,” Mark Haefele, chief investment officer at , sees the sharp decline in the Chinese market as an opportunity. “As an investor, it is important to take advantage of opportunities when they arise, this is often difficult as the crowd is usually moving in the opposite direction. For sure, there are risks in China, but then there are risks everywhere, and it depends on what is in the price,” Lapping said on Wednesday.

“Over the past year, the S&P 500 is up over 20 per cent while the Hang Seng is down 30 per cent. There is no way the underlying business values have diverged to this degree. This underperformance, particularly over the past month, has given us the opportunity to buy high quality, well-capitalised businesses at very low prices – an exciting opportunity,” Lapping concluded.