BEIJING (Reuters) - China's insurance regulator said on Monday it will create a new funding scheme that could funnel up to 200 billion yuan (20.4 billion pounds) of insurance company funds to support small companies and start-up firms.
The insurance capital will support the financing needs of small firms, technology companies and those in emerging industries, through investing in company stocks, preferred stocks and convertible securities, the China Insurance Regulatory Commission (CIRC) said in a statement on its website.
Small firms could receive up to 200 billion yuan in funding based on the insurance industry's estimates at the end of October, the CIRC said, but did not give a time frame.
The funding "can ease the financing difficulties of small and micro enterprises, promote their healthy development and lay a solid capital base", the regulator said.
Hurt by flagging growth from manufacturing to investment and domestic spending, China's economy experienced its worst slowdown since the 2008/09 financial crisis in the September quarter.
The cooling of the economy has compounded the difficulties of Chinese companies, which are already battling rising labour costs. Smaller companies have also complained of climbing funding costs.
Last month, China promised to help firms lower their funding costs by giving banks more flexibility to lend and allowing loss-making companies to list on the stock market, among other measures.
