BEIJING • China will encourage the development of annuities and endowment insurance to diversify people's investment into the stock market, instead of direct share purchases from savings, the government-backed Securities Times said in a report.
"The key consideration is to cultivate a multi-layer capital market," said Mr Xiao Yuanqi, a spokesman for the China Banking and Insurance Regulatory Commission.
"There'll be part of savings flows to the institutional investors for sure, then the professional investors can allocate those funds to bonds and equities investment," Mr Xiao said in a media briefing on Monday.
"We didn't mean to encourage direct purchase of shares from household savings," he added.
China's benchmark index rose on Monday as analysts believed the move would bode well for the country's capital market in the long run.
The regulator would learn from overseas experiences and explore the risk disposal framework of problematic institutions, and further strengthen the shareholding management of smaller banks to fend off contagious risks, the report quoted Mr Xiao as saying.
To recapitalise the cash-starved banking sector, Mr Xiao said the regulator would also develop capital tools to replenish banks' non-tier-one capital ratios.