China announced plans on Thursday to channel hundreds of billions of yuan annually into shares from state-owned insurers, in the country's latest effort to support its domestic equity markets.

Authorities will in the first half of this year call on insurers to invest at least 100 billion yuan (US$13.75 billion) of long-term funds into stocks, China Securities Regulatory Commission head Wu Qing said at a press conference held by the State Council Information Office.

The regulator will encourage both state-owned and commercial insurers to invest 30 percent of new annual premiums in A-shares, and encourage mutual funds to increase their A-share holdings' tradable market value by at least 10 percent annually over the next three years, Wu said.

The plan also involves guiding mutual fund managers to increase equity funds under their management, cut fund sales fee and promote the development of exchange-traded fund products.

Wu also said China's public offering fund sector had maintained a stable development trend in recent years, with further measures set to boost the development of this sector in 2025.

Assets under the management of China's public offering funds rose to 33 trillion yuan (about US$4.6 trillion) by the end of 2024 from 13 trillion yuan in 2019, according to Wu.

In 2025, the sales fees of public offering funds would be further slashed, saving a total of 45 billion yuan annually for investors, Wu told the press conference.

The CSI300 blue-chip index advanced 1.47 percent shortly after open on Thursday while the Shanghai Composite Index jumped 1.62 percent. The Hang Seng Index similarly gained more than one percent.

On Wednesday, the country's financial authorities signalled they would encourage medium- and long-term funds into the capital market to further stabilise stock performance.

The document, jointly released by the office of the Central Financial Work Commission, as well as five government departments, stressed attracting funds from commercial insurance, national social security and basic pension funds.

Annuity funds, public funds, and other medium- to long-term capital funds were also expected to increase their stock market investments, it said.

The plan aims to increase the proportion and stability of A-share investment in the portfolios of commercial insurance companies, and improve the investment management mechanism of the national social security fund and the basic pension insurance fund.

The performance of state-owned insurance companies will be assessed over a cycle of more than three years.

For the national social security and basic pension funds, the evaluation periods will be over five years and over three years, respectively.

Authorities have been intensifying policy support to prop up share prices as the world's second-largest economy navigates deflationary pressures and geopolitical tensions.

They introduced swap and re-lending schemes totalling 800 billion yuan for stock purchases in September as well as guidelines on market capitalisation management to encourage companies to improve shareholder returns. (Xinhua/Reuters)
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Last updated: 2025-01-23 HKT 15:11