On July 26, Caijing News (Reporter Xia Shuyuan) reported that insurance funds are continuously increasing their efforts to serve the real economy. On July 26, China Life Asset Management Co., Ltd. (hereinafter referred to as "China Life Asset") announced on its official WeChat account that the company has successfully initiated the establishment of a 2 billion yuan "China Life-Fujian Energy and Chemical Group Debt Investment Plan".

It is reported that the financing subject of the investment plan is Fujian Energy and Chemical Group Co., Ltd. (hereinafter referred to as "Fujian Energy and Chemical Group"). The funds are mainly used for a series of upgrading and efficiency-enhancing projects such as material adaptability technology reform, to promote Fujian Province to transform and upgrade traditional industries and cultivate new production forces through new technologies and processes. As of now, China Life Asset has managed assets with a total value of more than 5.8 trillion yuan and has invested more than 3.5 trillion yuan in serving the real economy.

Industry insiders said that since 2022, due to the downturn in the real estate industry and the increase in the risk of central and tail city investment companies, the number of bond plan issuances has decreased, and the investment direction has also shifted to new economic drivers, focusing on operations around new infrastructure, etc.

Insurance assets empower new production forces in Fujian and China Life Asset initiates the establishment of a 2 billion yuan debt investment plan.

The debt investment plan issued by the insurance asset management company, also known as the "bond plan", has always been one of the important sources of funds for local infrastructure investment due to its relatively long investment period, stable source of funds, and relatively high single investment scale.

Recently, China Life Asset successfully initiated the establishment of a 2 billion yuan "China Life-Fujian Energy and Chemical Group Debt Investment Plan".

Public information shows that Fujian Energy and Chemical Group was established in August 2021. It was reorganized and integrated by the original Fujian Energy Group and Fujian Petrochemical Group. It is a state-owned sole proprietorship registered in Fujian Province with a registered capital of 12.1 billion yuan and a credit rating of AAA.

Based on green, low-carbon, and high-quality development, the group focuses on four main industries: clean and efficient energy, petrochemical industry, financial services, and new materials and building materials, and two main directions: green energy and high-end materials.

According to Yan Ziqi, chief analyst of fixed income at Huaan Securities, the establishment and issuance of bond plans require the project to be funded as the basis. Therefore, more attention is paid to the quality of the funded projects themselves, and the requirements for the financing subject are to have sustained operating capabilities and a good development prospect, etc.

China Life Asset stated that the "China Life-Fujian Energy and Chemical Group Debt Investment Plan" is the first debt plan cooperation between China Life and Fujian state-owned enterprises and plans to invest in projects mainly upstream and downstream of the Sino-Saudi Guler ethylene project jointly developed and constructed by Fujian Energy and Chemical Group and Saudi Basic Industries Corporation.

Industry insiders said that the project is an important manifestation of deepening the linkage of innovation, industry and capital in the Fujian region, and has a strong demonstration effect on promoting insurance funds to enter Fujian, and will also make more powerful contributions to the "Belt and Road" construction.

With new economic drivers at the center, bond investment plans are turning to new infrastructure and new business areas.

The main investment objects of the bond plan are infrastructure and real estate investment projects, with the former being the mainstay. In the past, the financing subjects of bond plans mainly included local urban investment companies, construction central enterprises and their subsidiaries, and various real estate companies.

However, in recent years, more and more bond plans are moving towards new infrastructure areas and new economic business projects, including intelligent manufacturing, new energy, data centers, and so on.

Taking the "China Life-Fujian Energy and Chemical Group Debt Investment Plan" initiated by China Life Asset as an example, the invested projects will help promote the transformation and upgrading of Fujian's petrochemical industry and energy conservation and carbon reduction, and play a positive role in building high-end industrial clusters.

With new economic drivers at the center, the bond investment plan is turning to new infrastructure and new economic areas.

In the bond investment plan registered in May, Taikang Asset launched the "Wenzhou Tie投 Basic Infrastructure Green Debt Investment Plan"; PICC Asset Management's "Feixi New Energy Auto Intelligent Industrial Park Basic Infrastructure Green Debt Investment Plan", and Ping An Asset's "TBEA High-purity Silicon Basic Infrastructure Debt Investment Plan" are all invested in the field of new productive forces.

Data shows that as of the end of June 2024, insurance asset management companies have registered 178 bond investment plans, a 9.64% decrease from the same period last year; the registered scale is 280.994 billion yuan, which is basically flat with the same period in 2023.

Yan Ziqi said that since 2022, due to the downturn in the real estate market and the increased risk of the city investment companies in the middle and lower levels, the demand for bond insurance plans by high-quality city investment entities has decreased, leading to a reduction in the number of plan issuances.

In the view of Zhang Shun, Deputy General Manager of Asset Management Department of HeTai Life Insurance, affected by the substitution effect of the decline in bank loan costs and bond market issuance costs, as well as the impact of continue low interest rates and difficult-to-obtain eligible assets, the scale of bond investment plan issuances has gradually entered a downward trend.

Although the cost advantage of bond plans has been lost, the industry consensus is that in the context of a worsening shortage of high-quality assets, investing in non-standard assets such as new infrastructure bond investment plans can support the construction of national major infrastructure projects, which is beneficial to improve the matching degree of asset-liability duration.