The journalist learns that multiple ministries and commissions including the Ministry of Finance (MOF), National Development and Reform Commission (NDRC) and China Insurance Regulatory Commission are actively promoting policies related to Public-Private-Partnership (PPP) and speeding up in better guiding and promoting the connection of insurance capital with major national PPP projects.
“Insurance capital, especially life insurance which is long-term debt, is cut out for long-term investment, while major national PPP projects are safe and stable in profit. It matches with life insurance featured with long-term investment and financing. As to the introduction of insurance capital, on the one hand, it can raise more funds for major national projects and facilitate employment and economic growth; on the other hand, it expands the investment channels of insurance capital and helps to improve the rate of return on investment. Hence, a win-win situation will be achieved”, Wang Xujin, dean of the Insurance Department at Beijing Technology and Business University, told the journalist of the Securities Daily.
Liu Jian, inspector of the Financial Department of the MOF, indicates that according to statistics, the number of PPP projects launched by various provincial governments totals around 1,800, aggregating an investment of 3.4 trillion yuan. “Due to limited capital and high cost, it’s hard for industrial capital to undertake the implementation of large numbers of PPP projects. These projects are hardly responded by social capitals now. Therefore, institutional investors, mainly referring to insurance companies, pension funds and etc. in China, must be encouraged to be involved in PPP area.”
Wang Jun, deputy director of the Department of Information of the China Center for International Economic Exchanges, told the journalist that since local debts are now tightened up and local governments lack of capital. The introduction of other capitals through PPP mode helps to raise more funds for the investment of major national projects.
A person of the marketing department of an insurance asset management company told the Securities Daily that so far, there is no feasible mode that can be widely copied in the market. Ministries and commissions as well as governments of all levels are now still working on project promotion. However, as supervision policies gradually relax and insurance capitals actively explore the best way to be engaged in, the prospect of PPP will take a turn for the better.
Translated by Jennifer Lu
Latest comments