BEIJING (Reuters) – In a fresh effort to invigorate its struggling stock market, China announced on Wednesday plans to encourage major state insurers and commercial insurance funds to ramp up their investments in the A-share market.
According to a strategy jointly proposed by six financial regulators, including the securities regulator, large state-owned insurance firms will be instructed to enhance both the volume and proportion of their investments in mainland-listed Chinese stocks and equity funds.
These regulators are set to adopt a long-term performance appraisal approach for state-owned insurance enterprises. This will involve weighing the annual return on equity at no more than 30% in these evaluations, while prioritizing a more extended three-to-five-year cycle with at least 60% significance.
This initiative emerges as Chinese stocks have entered 2025 on a downward trend, fueled by concerns over the potential for U.S. President Donald Trump to levy significant tariffs on Chinese goods, thereby exacerbating the challenges facing an already slowing economy.
Moreover, the strategy includes increasing the involvement of China’s National Social Security Fund and pension funds in the stock market.
In addition, mutual fund managers will be encouraged to gradually increase both the size and share of equity funds under their management.
In recent months, China has introduced a series of measures aimed at bolstering investor confidence and rejuvenating its stock market. Among these measures, authorities have launched swap and relending initiatives totaling 800 billion yuan to finance stock purchases.
(Reported by Ziyi Tang, Yukun Zhang, and Ryan Woo; Edited by Jacqueline Wong and Alison Williams)
