Chinese companies are engaging in a record number of share buybacks, surpassing previous highs seen during the trade war. This surge in repurchases, particularly by state-backed enterprises, is a strategic move to bolster stock prices which have experienced significant declines this year. The financial commitment by these companies is substantial, signaling a strong intent to prevent further market routs and restore investor confidence.
This initiative comes at a time when China's industrial profit growth has moderated, easing to 15.1% in June from 21.1% in May, despite resilient exports. While overall first-half profits rose by 18.7% year-over-year, sectors like automobile manufacturing saw a 19.5% profit decline in the first half of the year due to consistent drops in car sales. This divergence highlights a two-speed recovery, with manufacturers benefiting from overseas demand while domestic consumption and property sectors struggle, creating a need for policy support to address economic imbalances.
Similarly, share buybacks are a global trend, with US companies announcing $166 billion in repurchases in July, marking the highest July ever and pushing year-to-date buybacks to $926 billion, $108 billion ahead of the 2022 record. UBS Group AG, for instance, announced a new $3 billion share buyback program, following a previous $3 billion plan, with at least $1 billion to be executed in the next three months. Beijing-based KE Holdings also detailed cross-market share buybacks between May and July 2026, though the repurchased shares had not yet been canceled as of July 10, indicating a capital management move.
