The Shanghai Composite had already seen a nearly 13% drop, from 3,200 to 2,800 points, according to Goldman Sachs as reported by Bloomberg. That loss owed to the ongoing trade dispute with the U.S., a slide in tech shares, and slower GDP growth in China. The composite reached a four-year low mid-month.
But then a government body charged with stabilizing share prices helped send the Shanghai down another 300 points with a big sell-off. The so-called national team sold $15 billion in shares during the quarter, according to Goldman. The index plunged another 300 points and the market lost $570 billion in value.
The Goldman analysis runs counter to claims of China’s securities regulator last month, which Bloomberg reported then. The regulator said that “relevant institutions,” which meant the groups that make up the national team, had actually increased their positions and that markets misinterpreted news that the state funds had sold off stocks and bonds.
The national team was started in 2015 during a market crash, according to Bloomberg Businessweek. It comprises a set of state-affiliated groups that are supposed to purchase shares. They include the national social security fund, foreign exchange market regulator, part of China’s sovereign wealth fund, and an entity that provides funding for margin-trading.
The Shanghai has dropped 28% since late January and is one of the worst performing major markets.