The State Administration of Taxation unveiled a draft version of new rule for personal income tax deduction. The draft included a deduction against tax of 1,000 yuan per month respectively for child education and mortgage interests for the first home, as well as a tax deduction for medical expenses and elderly parents support, which translates into a maximum deduction of taxable income of 4,600 yuan per month. The new rule will take effect from Jan 1, 2019. Following a raise of personal income tax-free threshold to 5,000 yuan per month from 3,500 yuan from Oct 1 this year, the new draft issued by China is expected to further reduce tax burden on Chinese household and therefore increasing disposable income which could provide a stimulus for consumer spending. China’s Gross Savings Rate has been remaining in a high level due to Chinese citizens’ saving culture and relatively lower social welfare level. It was measured at 46% in 2017, which is remarkably higher than the international standard. Thus, the demand for wealth management products has been growing strongly. More capital is expected to be injected into the insurance saving product amid the rapid business transformation of China insurance players, which should lead to a sustainable industry growth. As a consequence, we remain medium/long term bullish on the Chinese insurance industry.