The Chinese government’s corruption watchdog is investigating the country’s top insurance regulator, but that shouldn’t slow down overseas investment into North American and European real estate markets.
The Central Commission for Discipline Inspection is investigating Xiang Junbo, chairman of the China Insurance Regulatory Commission, over suspicion of “severe disciplinary violations,” the Financial Times reported.
The probe comes at a time that China’s Communist party is cracking down on the insurance industry.
But with so many insurance firms looking for returns and looking to diversify their portfolios, the investigation shouldn’t put a squeeze on overseas spending, Bloomberg reported.
According to Bloomberg, older insurers like Ping An Insurance Group or China Life Insurance will more likely be big buyers as opposed to upstarts such as Anbang Insurance, which owns the Waldorf Astoria and was recently in talks with Kushner Companies to come in as an investor on 666 Fifth Avenue.
The country’s insurance industry expanded rapidly under Xiang, who joined the regulatory commission as chairman in 2011. Relatively young companies like Anbang and Foresea Life Insurance expanded through sales of short-term, high-yielding investments that, in turn, kicked off buying sprees of public domestic companies in order to meet returns.
Corporate raiders jumped into the fold and regulators tightened the reins, but the country’s insurers still held $49 billion worth of investments outside China at the end of last year, or roughly 2.3 percent of assets.