China's CSI 300 enters bear market as sovereign funds return

· Economy · China

China's benchmark CSI 300 index has entered bear-market territory, falling 20% from its June peak as a prolonged selloff in mainland equities deepens and extends a 10-week rout. At the same time, sovereign wealth funds' investments in China and Hong Kong surged 190% after a bruising slump, according to CNBC, suggesting some large investors see value after the decline. The divergence highlights tension between weak market sentiment and long-term institutional bets on Chinese assets. The selloff comes as investors grow more cautious about AI spending and global growth.

Why it matters：A bear market in the world's second-largest stock market matters globally, and the return of sovereign funds shows how institutional investors may be positioning for a rebound.

Key points

  • CSI 300 is 20% below its June peak after a 10-week rout
  • Sovereign wealth fund investment in China and Hong Kong jumped 190%
  • Weak sentiment contrasts with long-term institutional bets

Sources (original reporting)

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