China’s Bold Move to Prop Up Capital Market with Long-Term Investments

New Strategy Targets Billions in A-Share Investments

China is doubling down on long-term stability in its capital market with fresh plans unveiled by the China Securities Regulatory Commission (CSRC) this week! At a high-profile press conference in Beijing, CSRC Chairman Wu Qing outlined a game-changing strategy to attract more institutional investors, boost A-share holdings, and create a “win-win” ecosystem for financial growth.

The Numbers You Need to Know

Public funds are now required to hike their A-share investments by at least 10% annually for the next three years. Major state-owned insurers will funnel 30% of new premiums into stocks starting this year—a move expected to inject hundreds of billions of yuan ($13.7B+) annually. By 2025, a new insurance fund pilot could add another 100B yuan to the market.

Weathering Market Storms

To reduce short-term volatility risks, evaluation periods for investments are getting extended: 3+ years for public funds and insurers, and 5+ years for pension funds. “This isn’t a sprint—it’s a marathon,” Wu said, citing the national social security fund’s stellar 11.6% annual returns over 20 years as proof long-term strategies work.

Bigger Picture

This overhaul aligns with China’s push for sustainable economic growth. By prioritizing value-based investments and refining market ecosystems, authorities aim to create a safer, more lucrative playground for global investors eyeing Asian markets. Could this be the sweet spot for young professionals and traders? Stay tuned!

Reference(s):

China sets targets for long-term investment in capital market

cgtn.com