CSRC in new drive to encourage investment

China will encourage investment in the stock market by capital resources with long-term investment cycles such as supplementary pensions offered by enterprises, the spokesman for the country's securities regulatory commission said at a news briefing held in Beijing Friday.

The commission will support investment in the capital market by "supplementary pensions offered by enterprises … via some professional asset management institutions," said Deng Ge, spokesman for the China Securities Regulatory Commission (CSRC).

Deng also noted that the commission will encourage investment by other types of long-term fund resources in the capital market.

"It is an important move to boost investors' confidence in the stock market," Li Daxiao, director of research at Yingda Securities Co, told the Global Times Sunday.

"The Chinese stock market has experienced big fluctuations, and if capital with long-term investment cycles is injected into the market, it will become more stable," Li said.

The capital market has seen poor performance in the past two weeks, with both A-share indexes having seen declines.

The total amount of the supplementary pensions offered by enterprises nationwide reached 579.4 billion yuan ($95.43 billion) in the third quarter, and the cumulative return rate in the first three quarters this year reached 3.69 percent, the Ministry of Human Resources and Social Security said Thursday.

Li said that now is a good time for more types of long-term funds - including the national social security fund, pension fund and housing fund - to invest in the capital market, as the current capital market valuation is relatively low.

While smaller investors have become concerned about the risks involved in a relatively weak stock market, Li tried to soothe their fears by giving the example of the national social security fund. A large part of the fund is invested in the capital market, and the fund has seen a return rate well above inflation in recent years.

"The average return on investment for the national social security fund in the past 11 years was 8.5 percent, much higher than the CPI growth rate," Dai Xianglong, chairman of the National Council for Social Security Fund, was quoted as saying by China Securities Journal during the National People's Congress in March 2012. Around 30 percent of it is invested in the stock market, he said.