China's Big Move: Boosting Long-Term Investments in the Capital Market 🚀
China is shaking things up in the financial world! On Thursday, the China Securities Regulatory Commission (CSRC) unveiled bold plans to amp up long-term investments in the capital market. CSRC Chairman Wu Qing emphasized how crucial long-term investments are for keeping the market steady and strong. 💪
The announcement came hot on the heels of a new implementation plan aiming to break down barriers and push for high-quality development in the capital market. This plan is all about tackling the big challenges that long-term investors face—think commercial insurance, public funds, national social security, and basic pension funds—and rolling out specific steps to get them more involved. 🎯
So, what's the game plan? In the short term, they’re looking to bump up the scale and proportion of A-share investments. Looking further ahead, they're setting up frameworks to encourage value-based, stable investment habits. This includes better evaluation systems, tailor-made investment policies, and a market ecosystem that's just more investor-friendly. 🌱
Here's where it gets exciting: Wu Qing announced that public funds are expected to hike their A-share holdings by at least 10% annually over the next three years! Plus, big state-owned insurance companies are set to funnel 30% of their new premiums this year into A-share investments. That's a whole lot of yuan heading into the market—think hundreds of billions every year! 🤑
And there's more on the horizon. The second phase of a pilot program for insurance funds is set for the first half of 2025, bringing in an extra 100 billion yuan (about $13.7 billion) in long-term stock investments. 📈
To make all this work, the plan also stretches out evaluation periods for long-term funds. Public funds, state-owned insurance companies, pension funds, and annuity funds will use evaluation periods of at least three years. The national social security and basic pension funds are going even longer, with assessment cycles over five years. ⌛
Wu Qing pointed out that these longer evaluation periods are key to shielding investments from short-term market ups and downs, helping to keep things stable. He gave a shout-out to the national social security and basic pension funds as a model for long-term investors—they've nailed an average annual return of 11.6% on A-share investments over the past 20 years! 🎉
Wrapping up, Wu said these new moves are all about boosting returns on long-term capital investments and creating a win-win situation for everyone in the market. Sounds like China's gearing up for some serious growth! 🌟
Reference(s):
China sets targets for long-term investment in capital market
cgtn.com
