International Finance: China to Alter Insurers' Investing Rules
By Jonathan Cheng
2008 年 8 月 27 日
The Wall Street Journal
Chinese regulators will give the nation's insurers greater leeway to invest in real estate, a move that could help these big investors diversify their holdings and could open a new source of capital for the weakened domestic property market.
The policy shift is part of a draft revision to the country's insurance law making its way through China's legislature. Wu Dingfu, chairman of the China Insurance Regulatory Commission, told China's legislature Monday that the revised insurance law, which includes other amendments, would "help to better regulate insurers' business conduct, prevent and control risks and protect insurants' interests," according to the official Xinhua news agency.
Zhou Daoxu, vice director of policy research at the regulator, said in an interview Tuesday that allowing insurers to invest in real estate is a "vital breakthrough" for the insurers. The draft revision to the law is set to be passed later this year, he added.
Compared with their counterparts in the West, Chinese insurers are relatively restricted in which assets they are allowed to invest in, and they have been lobbying for longer-term assets to match the big payouts they are expecting to make as China's rapidly aging population retires. Jeanne Kang, a real-estate lawyer with Jones Day in Beijing, described the rule change as a victory for an insurance industry that has long pushed for more freedom to invest in the property market.
But she said how much it helps the real-estate industry will depend on what she calls the "micro rules" -- the notices, circulars, guidelines and administrative orders issued from China's myriad ministries and government bodies.
Mei Jianping, a finance professor at the Cheung Kong Graduate School of Business in Beijing, said some insurers already have taken advantage of loopholes that allow them to buy properties they occupy, using 10% of the building and leasing out the rest.
With the prospect of even more flexibility in the law, insurers could pour a substantial amount of money into commercial properties because those generate the steady streams of revenue and potential for capital gains that insurers crave, Mr. Mei said.
China's real-estate sector has been battered in recent months as home buyers take a "wait-and-see" approach to the market and as banks tighten lending to developers and potential home buyers.