China is mulling rare intervention to arrest a $6 trillion stock-market meltdown, report says

• Chinese and Hong Kong stocks have shed over $6 trillion in valuation since 2021.
• Beijing is considering intervening to try to stabilize the crashing market, according to Bloomberg.

Chinese policymakers are weighing up rare intervention measures as they bid to end a meltdown in stock prices that's wiped out over $6 trillion since 2021, according to Bloomberg.

Beijing could set up a 2 trillion yuan ($280 billion) market stabilization fund that would be drawn from the offshore accounts of government-owned businesses, the publication reported Tuesday, citing people familiar with the matter.

Officials could announce the policy measures as soon as this week if they're rubber-stamped by the leadership of the ruling Chinese Communist Party, Bloomberg added.

On Monday, Premier Li Qiang called for "more forceful" state support for stocks, which have started the year in the red to extend a rout that's wiped out $6.3 trillion in market capitalization since early 2021.

The Hong Kong Hang Seng index climbed 2.6% Tuesday on the intervention rumors, while the flagship CSI 300 gauge edged up 0.4%.

China has previously tried to prop up its struggling stock market by banning big shareholders from selling, although it eased those regulations earlier this month, per a report from Reuters.

Policymakers are also battling to stabilize the country's economy, which has faltered since harsh zero-COVID lockdown restrictions were lifted in late 2022.

Figures published last week showed that China's Gross Domestic Product (GDP) expanded by 5.2% last year, slightly above the official target, but prices are deflating and demand looks sluggish.

Major real-estate developers Evergrande and Country Garden have also collapsed in recent years after piling up huge debt, sparking a property-market crisis that economists have warned could take a decade to fix.