SCIO briefing on actively encouraging the flow of medium- and long-term funds into the capital market and promoting its high-quality development

China Banking and Insurance News:

The NFRA previously promoted a pilot reform of long-term investment of insurance funds. How is the progress? And what are the further considerations for the next step? In addition, investors are very concerned about the real estate market. How is the progress of the urban real estate financing coordination mechanism? Thank you.

Xiao Yuanqi:

Thank you very much for your questions. You actually asked two questions. The first question is about the pilot reform of long-term investment of insurance funds. In October 2023, the NFRA granted approval for China Life Insurance and New China Life Insurance to pilot the establishment of securities investment funds, by raising insurance funds with a scale of 50 billion yuan, which will be invested in the stock market and held for the long term. Since the establishment of the fund over a year ago, it has been operating relatively smoothly, achieving a comprehensive and dynamic balance of profitability, safety, and liquidity. It is understood that the fund's returns are quite substantial, and the fund continues to be optimistic about the investment value of the stock market. Currently, other insurance companies are also actively applying to participate in this pilot. We have conducted research on the first batch of pilots, which is the 50 billion yuan investment raised by China Life Insurance and New China Life Insurance mentioned earlier, and believe it is very necessary, so we will fully support it. The second batch of pilots will be more flexible in mechanism than the first batch. Funds can be initiated and established by a single insurance company or jointly initiated and established by two or more insurance companies. The scale of the second batch of pilots is now set at 100 billion yuan. We plan to approve 50 billion yuan in the coming days, before the Spring Festival, which will be in place immediately for investment in the stock market. Subsequently, the number of insurance companies participating in the pilot program and the scale of the funds will be gradually expanded according to the willingness and needs of the insurance companies. This is the answer to your first question.

Concerning the second question, you just mentioned the real estate financing coordination mechanism, which was established at the beginning of 2024, and so far has delivered remarkable results. Here is some data. At the end of last year, the loan amount for commercial bank real estate "white list" projects reached 5.03 trillion yuan, exceeding the original expected target of 4 trillion yuan. As of Jan. 22, an additional 570 billion yuan in loans has been approved, bringing the total loan amount for real estate "white list" projects to 5.6 trillion yuan. The "white list" mechanism has provided sufficient and stable funding guarantees for the construction and delivery of real estate projects. Under this mechanism, we have adopted a clear principle: all eligible projects will be included in the whitelist and approved for loans as promptly as possible. In other words, every real estate project that meets the "5+5" criteria should be added to the whitelist for management, ensuring full inclusion of all eligible projects. Once the project is included in the "white list", banks will establish a green channel to actively provide financing support, ensuring loans are granted to all those eligible. Moreover, banks are also allowed to issue full loan amount in advance to the project fund supervision account opened by the real estate project company, enabling funding to be provided as early as possible, thereby ensuring that the projects can start construction early and proceed without interruption. So far, the real estate financing coordination mechanism has supported the construction and delivery of 14 million housing units. Recently, there have been positive changes in the real estate market. The real estate financing coordination mechanism has played an important and positive role in protecting the legitimate rights and interests of home buyers, stabilizing the real estate market, and promoting sustained and healthy development of the real estate market. In the future, we will continue to leverage this mechanism, guide financial institutions to stabilize financing support for the real estate sector, utilize the unique advantages of different financing tools and create a combined effect, thereby improving precision, timeliness, and effectiveness. At the same time, we will actively explore and summarize the experiences and good practices of the "white list" mechanism, and quickly optimize the relevant real estate financing system to adapt to and promote high-quality development of the real estate sector. Thank you.

Shou Xiaoli:

The last question, please.