Long-term investment products are becoming a trend in China as providers continue to seek better systems and services for people seeking endowment and health insurance products.
According to China Daily, the China Banking and Insurance Regulatory Commission said the country will continue to encourage Chinese citizens to invest in long-term products that will bear more beneficial fruit in the long run.
The financial regulator explained that the recently issued guidelines for encouraging the development of various insurance and banking segments should help spur interest in the long-term investments market.
Deputy director-general of the National Institution for Finance and Development, Zeng Gang, said among the efforts being implemented, as part of the drive in long-term investing is the promotion of investing in bonds and stocks instead of "nonstandard products."
Zeng further explained that the focus on stocks and bonds should provide more "sustainable sources of funds," thus encouraging investors from various institutions to set their eyes on rational decisions for investment initiatives.
For Zeng, there should be more capital market reforms in China's investment sector so as to open diversified segments that will improve protection for minority investors. He said the necessary reforms would transform the country's overall insurance and banking industry.
It is expected that the Chinese insurance circle will soon welcome household savings as part of the country's larger long-term investment market. Institutional investors are already exploring possibilities in this particular segment to add to existing segments such as mutual funds and brokerages.
Following the announcement of reforms to improve long-term investments in China, the benchmark index saw an uptick, Reuters reported. Market experts noted that the move would help improve the Chinese capital market as the years pass.
To further improve the experience of people who will join the long-term investment circle, China will develop several structures in smaller banks such as shareholding management. The purpose is to curb the negative impact of contagious risks in investments.
The regulator previously introduced the idea of converting household savings into long-term funds in China's capital markets, marking a positive change in the banking and insurance sectors.
On Sunday, China issued the guidelines that should help develop insurance and banking sectors in the country. Medium to large banks are expected to optimize their systems for better provision of services.
As mentioned, the guidelines encouraged existing insurance institutions to be more active in resolving risks so as to attract foreign institutions further. The move is believed to be part of Beijing's oath of opening up the Chinese financial market to the world.
Emerging industries should also feel the improvements led by long-term investment providers, the guideline noted. It remains to be seen which new long-term investing products will play a dominant role in the Chinese banking industry.
