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China Expands AIC Equity Investment Pilot, Letting More Banks and Insurers Join

Published: Mar. 6, 2025 3:57 a.m. GMT+8

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The National Financial Regulatory Administration

China is expanding its pilot program for financial asset investment companies (AICs), allowing more commercial banks to participate and bringing insurance funds into the fold.

The move aims to strengthen equity investment in technological innovation and private enterprise development.

The National Financial Regulatory Administration (NFRA) issued the new policy Wednesday, significantly broadening the scope of AIC investment.

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China's NFRA is expanding the scope of financial asset investment companies (AICs) allowing more banks and bringing in insurance funds to boost investments in tech and private enterprises.
The policy permits broader AIC investment across entire provinces, enhancing financing, attracting private capital, and lowering costs.
Concerns remain about the risks of tech sector investments, despite a significant commitment of over 350 billion yuan in pilot cities.

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Who’s Who

Industrial and Commercial Bank of China: The Industrial and Commercial Bank of China is one of China's five largest state-owned banks, previously having exclusive rights to establish financial asset investment companies (AICs). Under new regulations, more commercial banks can now establish AICs, expanding investment opportunities in technology and private enterprises.

Agricultural Bank of China: The Agricultural Bank of China is one of China's five largest state-owned banks that previously had exclusive rights to establish financial asset investment companies (AICs). Under new regulations, more commercial banks will be allowed to establish AICs, expanding financial resource mobilization for supporting technology businesses and private enterprises.

Bank of China: Bank of China is one of China's five largest state-owned banks previously privileged to establish financial asset investment companies (AICs). Under the new policy expansion by the National Financial Regulatory Administration, more commercial banks, beyond these five, can now establish AICs to support technology and private enterprise investments, aimed at mobilizing additional financial resources.

China Construction Bank: China Construction Bank is one of the five largest state-owned banks in China that were previously the only ones allowed to establish financial asset investment companies (AICs). Under the expanded pilot program, more commercial banks can now participate, which is intended to support technological innovation and private enterprise development.

Bank of Communications: The Bank of Communications is one of China’s five largest state-owned banks previously granted the privilege to establish financial asset investment companies (AICs). Under the new policy issued by the National Financial Regulatory Administration, the ability to establish AICs is now extended to qualified commercial banks beyond these five, aiming to support technology businesses and private enterprises with additional financial resources.

AI generated, for reference only

What Happened When

2017：: AICs were first introduced as part of China's effort to reduce corporate debt levels through debt-to-equity swaps.

2020：: The former China Banking and Insurance Regulatory Commission authorized five AICs to conduct equity investments in Shanghai.

September 2024：: The NFRA extended the program to 18 cities, including Beijing, Tianjin, Chongqing and Nanjing.

By March 5, 2025：: The NFRA issued a new policy expanding the scope of AIC investment and allowing more commercial banks to participate. Insurance funds were also brought into the fold.