China to Boost A-Share Market with Increased Insurance Fund Investments
Beijing - China has announced plans to mobilize state-owned insurers and commercial insurance funds to enhance their investments in the A-share market. This initiative aims to stimulate the currently underperforming stock market.
Under a joint plan issued by the securities regulator and five other financial authorities, major state-owned insurance companies will be required to augment both the magnitude and the percentage of their investments in mainland-listed Chinese stocks and equity funds.
The regulators will introduce a long-term performance evaluation system for these companies, allocating no more than 30% of the evaluation weight to annual return on equity and at least 60% to a broader three- to five-year performance cycle.
This announcement comes amidst a significant decline in Chinese stocks at the start of 2025, fueled by concerns over potential tariffs on Chinese exports by the United States. The plan also involves increasing the stock market investments of China's National Social Security Fund and pension funds.
Additionally, mutual fund managers will be encouraged to progressively expand both the scale and proportion of equity funds under their management.
China has implemented numerous measures to restore investor confidence and revitalize the stock market. In recent months, authorities have launched swap and relending programs worth 800 billion yuan for stock purchases as part of broader efforts to support capital markets.