China launches major measures to stabilize the market! The maximum daily net selling amount for stocks is 50 million yuan, and Beijing raises tariffs on the US to 125%.

In order to stabilize the stock market against the backdrop of the ongoing US-China trade war, China recently launched a bailout – the China Stock Exchange introduced a daily net selling cap of 50 million yuan (about NT$221 million) for hedge funds and large retail investors. (Summary: Trump: China immediately raised tariffs to 125% without knowing how to do it, Beijing retaliated with 84% tariffs and sanctioned 18 US companies) (Background supplement: Trump's tariffs make U.S. debt "risk aversion myth busted" lazy bag: Wall Street recognizes "risky assets", China and Japan are dumping murderers? Against the backdrop of the continued escalation of the Sino-US trade war, the US stock market has recently fallen for several days, and the Chinese stock market has not been spared. According to Google Finance data, the Shanghai Composite Index, the main index of China's stock market, briefly lost 3,100 points on April 7 this week, hitting a new low this year; The Shenzhen Component Index fell as low as 9,271.24 points on April 9, and the ChiNext Index also fell to 1,786.55 points on April 7, causing a lot of mainland investors to complain. However, it is worth noting that after the close of trading on Friday (11), the three major indexes of the Shanghai Composite Index, Shenzhen Composite Index and ChiNext Index have recovered their losses this week, what is the reason? China's bailout move: limit net selling In order to curb the further decline of the stock market, China has actually bailed out the market recently. According to Reuters, the China Stock Exchange imposed a daily net selling cap of 50 million yuan (about NT$221 million) on hedge funds and large retail investors to support market stability. The report quoted two sources as saying that the restriction was enforced through verbal warnings from securities brokers and was aimed at easing selling pressure. Two other brokerages said that if investors violate the rules, trading accounts may be suspended by the exchange. At the same time, if the stock market continues to fall, the daily net selling limit may be further reduced. In addition, in addition to selling restrictions, Beijing authorities have also taken measures such as liquidity support and increased holdings of state-owned enterprises to try to ensure that A-shares do not collapse with the global market. A brokerage source bluntly said: Such restrictions are set to conform to the will of the state and avoid going against the policy. Analysis of the pros and cons of the bailout However, analysts' views on this bailout measure are polarized. Some experts believe that limiting net selling can help stabilize the market in the short term and avoid a panic selling that triggers a bigger stock crash, especially at a time when the trade war has increased pressure on foreign capital to withdraw. However, some opponents pointed out that the move could reduce market liquidity, affect the operational flexibility of hedge funds, and may weaken investors' long-term confidence in A-shares. The Financial Times said that although tough regulatory measures can temporarily stabilize the performance of the index, if the trade war worsens, the market may be difficult to resist external shocks. In addition, the Bloomberg report also mentioned that China's bailout shows that the authorities are more worried about financial stability, but excessive intervention may make the market lose its ability to self-regulate and bury long-term risks. China imposes tariffs to 125% in a tough response to the United States In addition to the bailout measures, the Chinese government also announced on April 11 that it will increase the tariff rate on imports originating in the United States from 84% to 125% from April 12, directly responding to Trump's decision to raise tariffs on China to 145%. The spokesman of China's Ministry of Commerce severely criticized the US measures as "unilateral bullying and coercion", violating WTO rules and undermining the international economic and trade order. The spokesman stressed that under the current tariff level, US goods have lost their competitiveness in the Chinese market, and if the US side continues to "play tariff numbers", China will no longer pay attention to it; But non-tariff measures, such as restricting U.S. business in China or internationalizing the renminbi, could be taken to reduce dependence on the U.S. market. Related reports Trump Huang Jenxun "interviewed and laughed"! 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