China oks insurers' overseas investment
(Xinhua)
Updated: 2006-06-28 16:25
China's State Council, the cabinet, said in a circular that the country's
insurers can invest their funds overseas to expand their investment horizons.
"It is an important move and will benefit the development of the industry.
China doesn't have enough financial products for domestic insurers to invest,"
Wu Dingfu, chairman of the China Insurance Regulatory Commission (CIRC), told
Xinhua.
The circular, entitled the Ten Suggestions on the Reform and Development of
the Insurance Industry of the State Council, says that insurers are encouraged
to directly or indirectly invest in the capital market with the investment
proportion increased step by step, to invest in more types of securities
products, to invest in real estate and venture capital on a trial basis and to
purchase shares in commercial banks.
"There has been no official document of the central government relating to
the insurance industry for 20 years. This document will play a major role in
making the industry to make a breakthrough," said Hao Yansu, director of the
insurance department in the elite Central University of Finance and Economics.
Official figures show that the total assets of China's insurance industry has
topped 1.6 trillion yuan (200 billion U.S. dollars) .
To improve their investment earnings, insurers were given the go-ahead to
channel 5 percent to 10 percent of their combined yuan-denomination equity funds
into overseas markets in April this year.
The cap is expected to rise to 15 percent, Wu said.
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