China Boosts Investments in A-Share Market

BEIJING (Reuters) – China announced on Wednesday its initiative to guide major state insurers and commercial insurance funds to increase investments in the A-share market, aiming to stimulate its underperforming stock market.

Under a plan issued by six financial regulators, including the securities regulator, state-owned insurance companies will be encouraged to enhance both the scale and share of their investments in stocks listed on the mainland and in equity funds.

The regulators will also implement a long-term performance evaluation for state-owned insurance firms, with the annual return on equity accounting for no more than 30% of the assessment, while at least 60% will be based on a longer three-to-five-year cycle.

This initiative arrives as Chinese stocks began 2025 with significant declines, driven by concerns that U.S. President Donald Trump will impose substantial tariffs on Chinese goods, putting more strain on an already struggling economy.

The plan aims to boost investments from China’s National Social Security Fund and pension funds into the stock market. It will also direct mutual fund managers to gradually enhance both the scope and share of equity funds they manage.

To revive investor confidence and support its stock market, China has implemented numerous measures in recent months, including swap and relending schemes totaling 800 billion yuan for stock purchases.