China has taken steps to mitigate financial risks by tightening regulations around the insurance sector, encouraging the development of so-called patient capital and boosting investment in the technology sector.
Advertisement
The country’s cabinet, the State Council, on Wednesday issued a 10-point document outlining comprehensive regulations for the insurance industry, using strong wording like “long teeth with thorns” and “angular” to describe the stricter measures.
The plan also aims to boost the insurance sector’s investment in emerging industries, advanced manufacturing and new infrastructure – key areas that Beijing sees as vital to countering the effects of weak domestic demand and external economic risks.
“We need to fully leverage the long-term investment advantages of insurance funds, foster genuinely patient capital, and promote a virtuous cycle between funds, capital, and assets,” the document said.
Advertisement
Additionally as part of the new regulations, Beijing will tighten the vetting process for insurance companies entering the market, including scrutinising the backgrounds of managers and shareholders.
