BEIJING — China is moving to strengthen the foundations of its state-dominated financial system with a capital injection package worth about 360 billion yuan, or roughly $54 billion, targeting major banks and insurance companies.

The Ministry of Finance is leading the effort, which involves several of China’s largest financial institutions. The plan is designed to increase core capital, strengthen institutions against financial risks and support their ability to continue providing credit to the wider economy.

Among the biggest beneficiaries are Agricultural Bank of China and Industrial and Commercial Bank of China (ICBC). The two lenders plan to raise up to 160 billion yuan and 100 billion yuan respectively through private placements of new A-shares.

The proceeds are intended to replenish their core Tier 1 capital, giving the banks a stronger buffer while allowing them to maintain lending and support economic activity.

The government-backed recapitalization extends beyond commercial banks. China Life Insurance Group is set to receive 35 billion yuan, while China Taiping Insurance Group is due to receive 7 billion yuan.

Other state-controlled insurance and financial institutions are also included in the wider package. The aim is partly to strengthen solvency and improve the ability of major insurers to absorb financial shocks.

The move comes as China’s financial sector faces several challenges. Persistently low interest rates have put pressure on profitability, while weaker demand for loans has created difficulties for banks seeking to expand lending. Smaller insurance companies have also faced pressure on their profitability and solvency.

By strengthening the capital positions of major state institutions, Beijing is seeking to give the financial system greater capacity to absorb risks while continuing to support businesses and investment.

China’s Export-Import Bank is also expected to receive a 30 billion yuan capital injection. The Export and Credit Insurance Corporation is set to receive another 10 billion yuan, according to company announcements reported by Reuters.

Chinese authorities have been using state financial institutions as an important tool for supporting economic growth. Stronger balance sheets could allow these institutions to extend more credit while meeting regulatory capital requirements.

The latest package also reflects a broader government strategy to make China’s financial sector more resilient. Chinese state media reported that eight central financial enterprises have announced plans involving a combined 360 billion yuan in additional capital.

The scale of the operation is significant, but analysts will be watching closely to determine whether stronger bank capitalization translates into stronger lending and investment. Capital injections can improve financial stability, but they do not automatically create demand for new loans.

For Beijing, the immediate priority is to ensure that its largest financial institutions have enough capital to withstand potential pressure while continuing to support the economy.

The recapitalization therefore represents more than a simple rescue-style intervention. It is part of China’s broader effort to reinforce its financial system, maintain credit flows and give state-owned banks and insurers greater room to respond to economic challenges.