China Securities Regulatory Commission (CSRC) on Thursday outlined measures to bolster long-term investment in the capital market.
At a press conference held in Beijing, CSRC Chairman Wu Qing highlighted the vital role of long-term investments as a stabilizing force for the capital market.
The briefing was held one day after the release of a new implementation plan designed to address barriers and advance the high-quality development of the capital market.
The plan targets key challenges faced by long-term investors, including commercial insurance, public funds, national social security and basic pension funds, and introduces specific measures to facilitate their participation in the market.
The plan sets clear short-term and long-term goals. In the immediate future, it mandates an increase in the scale and proportion of A-share investments. Over the long term, it introduces institutional frameworks to promote value-based, stable investment behavior, including enhanced evaluation systems, tailored investment policies and improved market ecosystems.
Wu said that public funds are expected to increase their A-share holdings by at least 10 percent annually over the next three years. Additionally, major state-owned insurance companies are to allocate 30 percent of their annual new premiums to A-share investments from this year. The strategy is anticipated to inject hundreds of billions of yuan into the market annually.
Wu also revealed that the second phase of a pilot program for insurance funds, scheduled for the first half of 2025, will bring an additional 100 billion yuan ($13.7 billion) in long-term stock investments.
To support these initiatives, the plan extends evaluation periods for long-term funds. Public funds, state-owned insurance companies, pension funds and annuity funds will adopt evaluation periods of at least three years, while the national social security and basic pension funds will implement an assessment cycle of over five years.
Wu explained that long evaluation cycles are critical for insulating investments from short-term market fluctuations and fostering greater stability.
The national social security and basic pension funds was singled out as a model long-term investor, achieving an average annualized return of 11.6 percent on A-share investments over the past two decades. Wu attributed this success to the fund’s adherence to value-driven, long-term strategies.
Wu concluded by stating that the new measures aim to enhance returns on long-term capital investments, creating a mutually beneficial environment for all market participants.