China launches pilot program allowing insurers to invest in gold

Written by Adam Cadle

10/02/2025

China has launched a pilot program allowing 10 insurance firms to invest in gold as part of their medium-to-long-term asset allocation strategies because of low interest rates, shrinking investable assets, and rising gold prices.

People's Insurance Company of China, China Life Insurance, China Pacific Property Insurance, China Pacific Life Insurance, and six other insurers can begin gold investment activities effective immediately, the National Financial Regulatory Administration said in a statement.

The 10 insurance companies can potentially inject CNY200bn (US$27.4bn) into the gold investment market through the pilot scheme, according to a research report by China Merchants Securities.

The pilot program will be beneficial to deepen reforms for the use of insurance funds and promote the high-quality development of the insurance industry, the NFRA noted, adding that it will closely monitor the program's progress, enhance its supervision and effectiveness, and ensure the healthy development of insurance funds’ investments in gold.

Spot contracts for gold, deferred delivery contracts for gold, centralized pricing agreements, spot inquiry contracts, swap contracts for gold inquiries, and gold leasing operations listed or traded on the Shanghai Gold Exchange were included in the scope of the pilot scheme.

By limiting the scope of the pilot to contracts and gold leasing services listed or traded on the SGE, the NFRA ensures that insurance funds' investments in gold are fundamentally safeguarded, said Yang Juan, senior researcher at the Bank of China Research Institute.

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