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Chinese regulators encourage insurers' investment into manufacturing sector

Chinese regulators issued guidance to encourage insurers' investment in the country's manufacturing sector, aiming to move the sector up the value chain, Reuters reported March 28.

The People's Bank of China, the Ministry of Industry and Information Technology, and the banking, insurance and securities regulators said March 28 that they will support struggling manufacturers by allowing insurance companies to provide low-cost and long-term funds as part of efforts to scale up financial support.

Insurers in the country will be encouraged to invest in manufacturing firms' preferred stock, bonds for mergers and private equity funds, the news outlet said, citing the central bank.

Moreover, the regulators also asked insurers to establish insurance asset management firms for the manufacturing sector. They will also support securitization of credit assets in the sector and will encourage firms to speed up listing on stock markets at home and overseas, as well as issue bonds to raise funds.

Financial firms were also directed to conduct pilot programs to securitize bad loans in the manufacturing sector, while the regulators will step up monetary credit policy support for firms to modernize and expand overseas.