The China Insurance Regulatory Commission (CIRC) announced on Tuesday (January 5) that Chinese insurance institutions have formed an investment vehicle with initial fundraising of 40 billion RMB (US$6.07 billion).
The new entity, entitled China Insurance Investment (CII), incorporates 46 initial shareholders. Of these there are 27 insurers, 15 insurance asset management firms, and four private capital firms involved.
The CIRC said the new initiative is intended to enable diversification of the industry’s assets, and that the CII will focus its investment activities on serving national strategic needs and the real economy.
The State Council, the country’s highest decision-making body, granted approval for the establishment of the investment arm last June. It aims to raise as much as 300 billion RMB in phases to invest in infrastructure projects overseas.
The 40 billion RMB gathered in the first phase will be deployed to finance port acquisitions and construction projects in Sri Lanka, Turkey and the Republic of Djibouti in East Africa by state-backed China Merchants Steam Navigation. It will also be used for the building of liquefied natural gas (LNG) vessels to meet the needs of the US$28 billion Yamal LNG project in Russia, a gas development joint venture between Russia’s Novatek, French oil and gas firm Total, and China National Petroleum Corp.
As well as these, the CII has signed up to memorandum of understandings for over 100 billion RMB worth of investment projects, and has stated its intent to invest in some 200 billion RMB worth of projects, including overseas acquisitions and investments in clean energy and internet-enabled “big data” and “cloud-computing” ventures.
The CII has been registered in Shanghai’s free-trade zone with registered capital of 1.2 billion RMB. According to the CIRC, China’s insurance industry had 12.09 trillion RMB in total AUM as of November last year; 8.3 trillion RMB of which was investable assets.