Beijing has unveiled a second list of insurance companies taking part in an initiative to stabilise and bolster the stock market by injecting long-term capital.
The National Financial Regulatory Administration (NFRA), an agency under the State Council that oversees the financial sector, has approved the second batch of long-term-equity investment pilot projects, worth 52 billion yuan (US$7.2 billion), state media reported on Sunday.
The list includes China Pacific Insurance, Taikang Life Insurance, Sunshine Life Insurance and relevant insurance asset-management companies, according to the reports.
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These entities will participate in the pilot programme through contractual funds, a vehicle whereby the investment is managed according to predefined terms and objectives outlined in a contract. The insurers are expected to “leverage the role of long-term and patient capital to support the stable operation of the capital market”, the reports said.
The announcement follows an action plan issued last week by the country’s six financial regulators that called on institutional investors – including mutual funds, insurance companies, and social-security funds – to increase their holdings in Chinese stocks amid uncertainties at the start of Donald Trump’s second term as US president.
Last week, Trump threatened to impose tariffs on Chinese goods beginning next month and unveiled a plan to outpace China in the field of artificial intelligence.
Beijing’s action plan called on large state-owned insurers to invest 30 per cent of new annual premiums into A shares, and directed mutual funds to raise their holdings by at least 10 per cent annually over the next three years, among other measures.
The measures could lead to an influx of US$236 billion this year, according to UBS.
The NFRA said during a press conference last week that the second batch of insurance funds is set for 100 billion yuan, with subsequent batches expected to gradually increase in scale.
People visit The Bund across from the financial district of Pudong in Shanghai on January 16, 2025. Photo: Reuters alt=People visit The Bund across from the financial district of Pudong in Shanghai on January 16, 2025. Photo: Reuters>
The first batch of long-term insurance investment pilots was approved in October 2023, with China Life Insurance and New China Life Insurance launching securities investment funds totalling 500 billion yuan.
