A report from Securities Daily estimates that China’s local governments, brokerages and insurers have established or are planning to establish specialist bailout funds worth over 500 billion yuan.
The local governments and state-owned assets commissions of 17 province-level administrative entities, including Ningxia, Jiangxi, Jiangsu, Hainan, Shenzhen, Beijing, Shanghai, Guangdong, Zhejiang, Fujian, Anhui, Shandong, Henan, Sichuan, Hunan, Jilin and Hebei, have unveiled support policies and launched or plan to establish bailout funds worth approximately 256 billion yuan in total.
These include plans by the Ningxia Autonomous region to establish a private enterprise development policy bailout fund worth 3 billion yuan, as flagged by the release of the “Several Opinions on Expediting the Healthy Development of the Private Economy” (关于促进民营经济健康发展的若干意见) on 23 November.
Shenzhen has launched two listed company private equity bailout funds with a total value of 17 billion yuan, while on 21 November the Jiangxi province government announced the establishment of a 10 billion yuan listed company bailout fund to alleviate escalating risk in relation to equity collateral.
Chinese brokerages have also put together asset management plans to support private enterprise worth over 70 billion yuan.
Figures from the Securities Association of China (中国证券业协会) indicate that as of 23 November 15 securities companies had executed agreements and committed funds to asset management plans for the support of private enterprises, including Everbright Securities and Dongxing Securities.
In addition to asset management products at least several brokerages also plan to establish specialist funds for the bailout of private enterprises with an estimated total value of 100 billion yuan.
China Galaxy Securities has just established the 60 billion yuan Galaxy Development Fund (银河发展基金), while Western Securities plans to launch a private enterprise bailout fund worth up to 10 billion yuan.
Chinese insurers have also launched 86 billion yuan in special bailout products, including China Life, Taiping Insurance, the People’s Insurance Company of China, New China Life, Sunshine Insurance Group and Taikang Insurance, which has just launched an 8 billion yuan bailout product.
The Shanghai and Shenzhen Stock Exchanges have jointly issued 4 special bailout bonds collectively worth around 4.3 billion yuan, that will be used alleviate equity collateral risk via the establishment of specialist equity investment funds.