China’s national team of state funds has supported stocks over the past week by buying into large-cap stocks on Friday and Monday, according to people familiar with the matter. Beijing announced a number of measures to help prop up its ailing equity market and bolster confidence after the emerging market slipped into a bear market.

The government has exhibited a long history of stepping into provide equities a helping hand through its national team during periods of extreme volatility or during political risk-off events.

“The national team might be switching gear to passive investment,” Dai Ming, a fund manager with Hengsheng Asset Management Co., told Bloomberg. Active investment creates “market noise and systemic risks as some investors bet the national team will always be there to prop up stocks. Stabilization funds invested through passive funds will not only smooth out market volatility but also save them from the moral risk.”

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