China's National Team, state-backed investors led by a sovereign wealth fund unit, plans to slash ETF holdings tracking domestic equities by 90% during the first half of 2026. This unprecedented move signals authorities' concern about market valuations and potential instability in the Chinese equity markets, representing a significant shift in market intervention strategy.

The group has already dumped approximately $170 billion in such ETFs so far in 2026, including $30 billion since the beginning of April. The scale of these sell orders dwarfs previous interventions and represents one of the largest state-directed market operations in recent Chinese market history, reflecting the government's growing unease with current valuation levels.

This massive divestment has likely contributed to downward pressure on the CSI 300 Index as the government attempts to temper what it perceives as market froth. The move underscores Beijing's continued direct involvement in market mechanics and its willingness to deploy state resources to influence market direction, potentially setting a precedent for future interventions in volatile market conditions.