China injects $47 billion into state-owned banks and insurance companies

China plans to inject approximately $47 billion into state-owned banks and insurance companies, in a coordinated move to bolster the capital of financial institutions, support their ability to withstand risks, and continue financing the economy. Three insurance companies said that China’s Ministry of Finance will inject 57 billion yuan (about $8 billion) into their capital as part of Beijing’s efforts to strengthen the resilience of the financial system.

China Life Insurance Group, the largest life insurer in China, will receive 35 billion yuan, while China Taiping Insurance Group will receive 7 billion yuan, according to separate statements from the two companies. Meanwhile, People’s Insurance Company of China said it plans to raise up to 15 billion yuan through a private placement of Class A shares to the Ministry of Finance, with the proceeds to be used to strengthen the company’s capital.

China Life said that the capital injection represents an important step to enhance the financial sector’s capacity to serve the real economy and support high-quality development in the finance and insurance sectors, adding that the process will boost the group’s ability to manage risks. For its part, Taiping said the new funds will support its solvency and other key indicators. The capital enhancement plan also includes China’s largest state-owned banks.

Agricultural Bank of China and Industrial and Commercial Bank of China said they plan to raise up to 160 billion yuan and 100 billion yuan, respectively, through private placements of Class A shares to the Ministry of Finance, the China National Tobacco Corporation, and its subsidiaries.