Chinese Firms Set Aside $2.7 Billion to Stem Stock Market Bleeding

Chinese firms set aside US$27 billion for stock buybacks as Trump's tariffs roil markets

Chinese companies have set aside a record US$27 billion for stock buybacks, as the country's firms respond to the uncertainty caused by US President Donald Trump's trade tariffs.

The buyback plans, which were announced in the first half of the year, are a sign that Chinese companies are confident in their financial health and are looking to reward shareholders despite the ongoing trade tensions.

According to data from the Shanghai Stock Exchange, the total value of buyback plans announced by listed companies in the first half of the year reached a record high of US$27.2 billion, surpassing the previous record of US$23.4 billion set in the second half of 2017.

The buybacks are seen as a vote of confidence in the Chinese economy, which has been growing steadily despite the tariffs imposed by the US. The tariffs, which were introduced in March, have had a significant impact on China's exports and have led to a decline in the country's economic growth.

However, Chinese companies have been able to offset the impact of the tariffs by increasing their domestic sales and reducing their reliance on exports. This has helped to drive growth in the country's consumer sector, which has been a key driver of the economy.

The buyback plans are also seen as a sign that Chinese companies are looking to increase their financial flexibility and are preparing for any potential changes in the trade environment. The plans allow companies to repurchase their own shares, which can help to boost their stock price and increase their financial leverage.

The largest buyback plan announced by a Chinese company so far this year is US$5.5 billion by e-commerce giant JD.com. Other companies that have announced significant buyback plans include automaker Geely, which has set aside US$2.5 billion, and technology company Tencent, which has set aside US$2.2 billion.

The buyback plans are expected to continue to be a key driver of the Chinese stock market in the second half of the year, as companies look to increase their financial flexibility and reward shareholders. The plans are also seen as a sign that Chinese companies are confident in their financial health and are looking to increase their investment in the economy.