The Chinese government bought shares worth 900 billion yuan ($147 billion) in the last two months from the country's stock market to artificially lift stock prices in a bid to shore up investor confidence and stem the fall, according to investment banking firm Goldman Sachs.

Since mid-June, the Chinese equity market has been witnessing high volatility, as investors saw the bull run fading. 

In the past one year, the Chinese equity index rose more than 150%, supported by a massive increase in retail investor participation.

But on 27 July, the benchmark Chinese equity index Shanghai Composite fell 8.5%, posting its worst one-day decline since February 2007.

Alarmed by the heavy sell-off, the Chinese government started intervening by funding state-backed China Securities Finance Corp. (CSF), which was entrusted to buy shares to prop up the market. The government also put many initial public offerings (IPOs) on hold.

Goldman Sachs estimates that the Chinese government would have spent 860-900 billion yuan to stop the market crash in June and July, AFP reported.

The firm said "the total war chest of potential funds available for market support at around 2.0 trillion yuan -- including funds already spent."

A report by Bloomberg News on Thursday said that the CSF was asking for another 2.0 trillion yuan to contain the volatility in the stock market. If the government approves it, the overall funding will go up to 5.0 trillion yuan.

However, Goldman said that the concerns over the government taking back its support to the market are "overdone."

"The probability of a rash exit is low as the market has not yet stabilised and the government has no pressing need for the funds," the investment banker said.