Bloomberg writes, "China has created what amounts to a state-run margin trader with $483 billion of firepower, its latest effort to end a stock-market rout that threatens to drag down economic growth and erode confidence in President Xi Jinping's government. China Securities Finance Corp. can access as much as 3 trillion yuan of borrowed funds from sources including the central bank and commercial lenders, according to people familiar with the matter. The money may be used to buy shares and provide liquidity to brokerages, the people said, asking not to be named because the information wasn't public. While it's unclear how much CSF will ultimately deploy into China's $6.6 trillion equity market, the financing is up to 25 times bigger than the support fund started by Chinese brokerages earlier this month. That's probably enough to restore confidence among China's 90 million individual investors, says Bocom International Holdings Co. The Shanghai Composite Index jumped 3.5 percent on Friday, capping a two-week rally that's turned it into one of the world's best-performing equity gauges."
"Chinese shares capped the week with a two-day rally, while Hong Kong shares finished their first positive week in four, as worries about a liquidity crunch started to ease. The Shanghai Composite ended up 3.5% at 3957.35. The index rose 2.1% for the week, its second positive week since the June selloff. The smaller Shenzhen Composite ended 5% higher at 2190.42, up 7.6% for the week. Hong Kong's Hang Seng Index rose 1% Friday, closing out with its first weekly gain of 2.1% after four straight weeks of losses. A gauge of Chinese companies listed in the city rose 0.9%. Chinese officials' scramble in weeks past-from encouraging brokerages to buy stocks to making it easier to invest with borrowed funds-seems to have borne fruit. Shanghai has bounced about 12.8% from its recent low of 3507.19 on June 8, though remains down roughly a quarter from its June peak," writes The Wall Street Journal.
The Associated Press writes, "The new U.S. commander of the Pacific Fleet assured allies Friday that American forces are well-equipped and ready to respond to any contingency in the South China Sea, where long-seething territorial disputes have set off widespread uncertainties. Adm. Scott Swift, who assumed command of the Pacific Fleet in May, said the Navy may deploy more than the four littoral combat ships it has committed to the region. Swift also disclosed that he was "very interested" in expanding annual combat exercises the U.S. Navy holds with each of several allies into a multi-nation drill, possibly including Japan. Asked how many resources the U.S. military was ready to devote to the South China Sea, Swift told a small group of journalists in Manila that he understood the concerns of America's allies. 'The reason that people continue to ask about the long-term commitment and intentions of the Pacific Fleet is reflective really of all the uncertainty that has generated in the theatre now,' Swift said. 'If we had the entire United States Navy here in the region, I think people would still be asking, 'Can you bring more?'"