About 80 billion yuan (10 billion U.S.dollars) of China's insurance fund will flow into the railway upgrading project between Beijing and Shanghai, one of the country's busiest railways.

Wu Dingfu, chairman of the China Insurance Regulatory Commission, revealed the news at a recent forum on innovation and development of China's insurance industry.

Insurance companies' investment will account for half of the total fund needed for the railway reconstruction project, Wu said.

Insurance companies will inject fund into the project year by year, and it is not clear about the exact figure for this year, he said.

Insurance fund has become quite active in China's financial market. During the first seven months of this year, the investment of Chinese insurance companies hit 1.031 trillion yuan (128.875 billion U.S.dollars), up 34.77 percent over the same period last year, according to the latest statistics revealed by the China Insurance Regulatory Commission.

The investment returns of Chinese insurance industry averaged 3.6 percent in 2005, while the annual yield of the reconstruction of the Beijing-Shanghai high-speed railway will range from 8 percent to 12 percent.

China is expected to invest 1.25 trillion yuan in railway construction in the 11th Five-Year Program (2006-10), in which 160 billion yuan will be spent in 2006.

Source: Xinhua