For the first time, Chinese insurers have received permission from the government to invest in gold. According to experts, this could lead to more than 27 billion dollars in gold investments by the ten largest insurers in China.
With this measure, Beijing wants to ensure more alternative investment opportunities for that sector. Investments from the Chinese insurance industry could further boost the price of gold.
This concerns large insurance companies such as PICC Property & Casualty and China Life Insurance. The government now allows them to invest up to 1 percent of their assets under management in gold.
The government would like to offer these insurers more investment opportunities. The insurers are bound by strict rules regarding investment choices and the amount of money they are allowed to invest in shares and bonds.
China’s weak economy and the Chinese real estate market crisis have also limited good investment opportunities in its own country. Gold is now the first commodity permitted to invest in the insurers.