The headquarters of the People's Bank of China in Beijing Photo: IC

China's central bank and top securities regulator have vowed to ramp up supportive policy tools to shore up the country's capital market. 

The remarks were made at a recent seminar on stock buyback and repurchase loaning program, which is organized by the People's Bank of China (PBC) and the China Securities Regulatory Commission (CSRC), according to a statement seen on the central bank's official website on Sunday. 

Xuan Changneng, vice governor of the central bank, and Wang Jianjun, vice chairman of the CSRC, attended the meeting and delivered speeches.

At the meeting, financial institutions noted that stock buyback and repurchase loan products have been broadly welcomed by listed companies and major corporate shareholders, the statement said.

In 2024, nearly 300 billion yuan ($40.96 billion) in stock buyback and repurchase plans were announced by listed companies. Since the implementation of that policy tool, more than 300 listed companies have announced using bank loans for stock buybacks or repurchases, of which over 40 percent possess a market value exceeding 10 billion yuan, according to the statement.

The central bank noted that the policy tool's catalytic effect has increasingly become evident, contributing significantly to the stable operation of the capital market and boosting market confidence.

Stock buybacks and repurchases are internationally recognized methods for listed companies to manage valuations. Li Changan, a professor at the Academy of China Open Economy Studies at the University of International Business and Economics, told the Global Times on Sunday that stock buybacks and repurchases are strategies used by listed companies to help stabilize stock prices. 

"Public companies can either buy back their own shares or encourage major shareholders to increase holdings. These actions often indicate confidence in the company's prospects which help strengthen shareholder trust," Li said.

In October 2024, to support valuation management of listed companies, the central bank, together with the CSRC and the National Financial Regulatory Administration, introduced the stock buyback and repurchase loaning program.

This supportive policy has since been optimized to address market concerns, by reducing the required own funds to 10 percent, extending the maximum loan term to three years, encouraging commercial banks to provide credit loans, and facilitating loan transactions between banks and enterprises to meet the financing needs of listed companies, according to the PBC.

Listed companies that actively engage in valuation management are those with strong operational performance and a management team confident in their business development, the central bank said.

Li said that the corresponding government policy has a significant motivational effect on the capital market because stock buybacks by listed companies can provide support for stock prices. "This specific financial policy support now plays a role in boosting investor confidence in the capital market," the expert said.