(Adds detail, context)
BEIJING, March 28 China said on Tuesday it would
expand the scope for insurance companies to provide more
low-cost and long-term funds for the manufacturing sector as
part of a broader effort to ramp up financial support for
struggling manufacturers to upgrade.
China will support insurers investing in manufacturing
firms' preferred stocks, bonds for mergers, and private equity
funds that help to upgrade manufacturing, the central bank said
on its website.
Insurers would also be encouraged to set up insurance asset
management entities for the sector, the document said.
A 12-page document setting out the proposed changes was
jointly issued by five top government entities - the People's
Bank of China (PBOC), Ministry of Industry and Information
Technology, and the country's banking, insurance and security
regulators - to address China's urgent need to move its largely
low-end manufacturing industry up the value chain.
The document said China would also support securitization of
credit assets in the sector and would encourage firms to quicken
their pace at which they list on stock markets at home and
overseas, as well issuing bonds to raise funds.
Banks and financial institutions were also told to
"appropriately" conduct pilot programs to securitize bad loans
in a sector "burdened with overcapacity to actively reduce
China will also step up monetary credit policy support for
firms in the sector to modernize and expand overseas.
China first laid out its Manufacturing 2025 initiative in
May of 2015. Its objectives included internally developing
nationwide competencies in 10 critical sectors, new energy
vehicles, rail transport equipment, automated machine tools and
robotics, and power equipment.
But foreign business groups have grown increasingly
concerned that China's plan to boost domestic manufacturing by
2025 could be used to discriminate against foreign firms in
favor of Chinese competitors.
(Reporting by Nicholas Heath, Shu Zhang and Yawen Chen; Editing
by Eric Meijer)