China approves 52 bln yuan in 2nd batch of pilot programs for long-term stock investments

China's financial regulatory authority has approved the launch of the second batch of pilot programs for long-term stock investments, with a scale of 52 billion yuan (7.25 billion US dollars).

China Pacific Life Insurance Co., Ltd., Taikang Life Insurance Co., Ltd., Sunshine Life Insurance Co., Ltd., and relevant insurance asset management firms are authorized by the National Financial Regulatory Administration to participate in the pilot through contractual funds, engaging in long-term stock investments to leverage long-term capital and patient capital, thereby supporting the stable operation of the capital market.

On Wednesday, Chinese financial authorities unveiled a plan outlining measures to encourage medium- and long-term funds to move into the capital market to further stabilize stock performance.

Wu Qing, chairman of the China Securities Regulatory Commission, elaborated that public offering funds would increase their A-share holdings of circulating market capitalization by at least 10 percent annually over the next three years.

Efforts are being made to ensure large state-owned insurance companies allocate 30 percent of their newly added annual premium incomes to invest in A-shares starting in 2025, which is expected to inject hundreds of billions of yuan of long-term capital into the A-share market each year, he said.

The second batch of pilot programs for long-term stock market investment from insurance funds will be implemented in the first half of 2025, with a minimum scale of 100 billion yuan, gradually expanding thereafter, Wu added.

In March 2024, China Life Insurance and Xinhua Insurance jointly launched the country's first private equity securities investment fund established by insurance companies to enter the stock market, with an investment scale of 50 billion yuan, which marks one of the first pilot projects for the long-term stock investment reform of insurance funds.