China is weighing measures to prop up its stock markets, could reportedly mobilize $278 billion

China is considering a rescue package backed by offshore money to stave off a slump in its struggling stock markets, according to Bloomberg News.

The report, citing people familiar with the matter, said Chinese authorities are aiming to get about 2 trillion yuan ($278 billion), primarily through offshore accounts of Chinese state-owned companies to help stabilize the market by purchasing stocks onshore through Hong Kong markets.

According to Bloomberg, Chinese policymakers have also put aside 300 billion yuan of local funds that would be used to invest into onshore shares through state-owned financial firms China Securities Finance Corp. or Central Huijin Investment Ltd.

Mainland China’s CSI 300 index slid 11.4% last year, clocking its third straight year of falls. Hong Kong’s Hang Seng index fell nearly 14% in 2023, making it the worst performing major Asian stock market.

The Bloomberg report comes a day after Chinese Premier Li Qiang said during a state council meeting the country will be rolling out measures to stabilize its stock markets.

“We must take more powerful and effective measures to stabilize the market and confidence,” Li said, according to state media.

“It is necessary to enhance the consistency of macro policy orientations, strengthen innovation and coordination of policy tools, consolidate and enhance the positive economic recovery, and promote the stable and healthy development of the capital market.”

No further details were released at the Monday meeting, and there was no indication about how much money will be mobilized or when the measures will kick in.

China previously pointed that it has not relied on to stimulus so far.

“In promoting economic development, we did not resort to massive stimulus. We did not seek short-term growth while accumulating long-term risks,” Li said in a speech last week at the World Economic Forum in Davos, Switzerland. “Rather, we focused on strengthening the internal drivers.”

Li referenced this while noting that China’s economy grew by around 5.2% in 2023. Official figures also showed 5.2% GDP growth in China last year.

Read more on Bloomberg’s report that China is considering a rescue package for its stock markets.