China Loosens Capital Rules to Boost Insurers’ Long-Term Equity Bets

China’s top financial watchdog has eased capital requirements for insurance companies’ long-term stock holdings, marking another step in the government’s effort to channel institutional funds into the nation’s equity markets.

The National Administration of Financial Regulation on Friday said it had reduced risk factors used to calculate required capital buffers for certain stock investments and export credit insurance. The regulator said the move was aimed at encouraging insurers to deploy more “patient capital” in support of the real economy.

The adjustment is part of a years-long campaign by Beijing to steer long-term institutional capital — particularly insurance funds — into the financial markets to stabilize volatility. By lowering the risk weighting of qualifying investments, the change effectively reduces the amount of capital insurers must set aside, freeing up more funds for equity investment.