MNI BRIEF: China Boosts Insurance Funds' Equity Allocation

China has raised insurance funds' equity asset allocation corresponding to certain solvency ratios by 5%, the National Financial Supervisory and Administration Bureau said on Tuesday, aiming to raise support for the capital market and the real economy.

Authorities will increase the concentration ratio for investing in venture capital funds to encourage exposure to national strategic emerging industries, the notice said, adding that the investment ratio for regular accounts in tax-deferred pension insurance will no longer be calculated separately.

The People’s Bank of China would be likely to ease monetary policy further should U.S. tariffs hit the country’s financial markets, but its scope for cutting interest rates will be constrained by concerns about banks’ deteriorating net-interest-margin and weak loan demand, advisors and former officials told MNI. (See MNI: Low Credit Demand Feeds PBOC Easing)