China set ground rules yesterday for its insurance industry to invest in unlisted commercial banks, paving the way for a sector with almost two trillion yuan (250 billion US dollars), in assets to join the nation's banking overhaul, The Wall Street Journal reported. The guidelines issued yesterday by the China Insurance Regulatory Commission limit the number and types of banks in which insurers can invest, part of efforts to combat the risk the new investment channel may bring, said the paper. But they also form part of an overall effort to create a bigger and stronger insurance sector, contributing to Beijing's goal of increasing assets managed by the insurance industry to above five trillion yuan (625 billion US dollars) in 2010, from 1.758 trillion yuan (219.75 billion US dollars) at the end of August. Insurance institutions are allowed to invest in local, unlisted state-owned commercial banks, stockholding commercial banks and city commercial banks, the rules published on the CIRC Web site said. They are allowed to make major investments in a maximum of two unlisted commercial banks. Investments will be considered major if they comprise more than 5% of a bank's total equity.