Investment rules for insurers

Around 45 billion yuan (US$5.7 billion) in insurance capital could flood into China's banking sector after the nation's top insurance watchdog unveiled a package of investment rules last week.

According to detailed rules issued by the China Insurance Regulatory Commission for insurers' equity investment in banks, insurance institutions could invest no more than 3 per cent of their total assets in State-owned commercial banks, joint-stock commercial banks and city commercial banks.

By the end of last year, the total assets of China's insurance sector had reached 1.5 trillion yuan (US$190 billion), implying that 45 billion yuan (US$5.7 billion) in insurance capital could be poured into China's banking sector this year.

FDI falls year-on-year

Foreign direct investment (FDI) to China fell 1.52 per cent year-on-year in the first nine months of 2006.

Total investment slipped to US$42.59 billion, Ministry of Commerce spokesman Chong Quan told a press briefing last week.

But FDI in September rose 2.72 per cent year-on-year to US$5.4 billion, bucking a trend that started in May.

That compares with August's year-on-year fall of 8.49 per cent.

Chong added that 3,794 foreign-funded firms were established last month, down 0.94 per cent year-on-year. Over the nine-month period, 30,021 such firms were established, down 6.83 per cent year-on-year.

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