The People's Bank of China is turning its emergency support for shares into a standing one. It cut the rate on its relending scheme for buybacks and stake increases from 1.25% to 1% and made the facility permanent, and banks are being urged to lend more through it.

Under the scheme, the central bank lends cheaply to banks, which pass the money to listed companies and major shareholders buying back shares or raising their stakes. Regulators now want more companies from major stock indexes and prominent tech firms to take part, which stretches the channel well past its original scope.

The central bank also said it will run swap operations for brokerages, fund managers and insurers as needed, with more eligible participants and somewhat lower fees. The swaps and the relending scheme both date from October 2024. The China Securities Regulatory Commission said a third round of swaps will launch shortly, with 31 approved securities and fund companies seeking quotas totalling more than 100 billion yuan.

The urgency is plain from the market. The CSI 300 fell 8.5% in October, its steepest monthly drop in more than ten years, and had lost ground for twelve straight weeks as of last Friday, a record run. The economy is sluggish and investors doubt that AI will bring profits. Beijing is no longer tuning market plumbing; it is aiming central bank money directly at share prices. Making the rate permanent turns a patch into a commitment, and cheap state credit propping up equities is easier to start than to withdraw.

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