China will inject $54bn (£40bn) into its financial sector as Beijing attempts to shore up banks and insurers in the face of faltering economic growth.

A host of financial institutions said they were due to receive billions of yuan in capital from state institutions including the ministry of finance and even the company that runs the country’s tobacco monopoly.

The stimulus is designed to help China bolster the ability of its financial sector to invest in the stock market and lend to businesses, amid signs that the world’s second largest economy is struggling to escape weak growth.

The country’s largest life insurer, China Life Insurance, will get 35bn yuan, while the China Taiping Insurance Group said it would receive 7bn.

The People’s Insurance ⁠Company of China said it planned to raise up to 15bn yuan through a private placement of A-shares – stock that specifically allows investors to trade in China-based companies – to the ministry ​of finance, with the proceeds used to replenish ‌its capital.

The initiative could help bolster ‌state insurers that have been directed by Beijing to support the stock market with medium- and long-term funds, while positioning them to help regulators ‌manage smaller, higher-risk insurance companies.

The insurance sector has been struggling with eroding profitability owing to persistently low interest rates, with numerous small and mid-sized insurers reporting deteriorating solvency ratios, a measure of financial health.

“The injection is an important step by the country to enhance the financial sector’s ability to serve the real economy and promote the high-quality ‌development of the financial and insurance industries,” China Life said, adding that it would strengthen the group’s ability to withstand risk.

Separately, three state lenders on Sunday also announced they will receive a combined 290bn yuan in capital injections.

The plan was first announced at an annual parliamentary meeting in March this year, extending a financing tool that had helped bolster some other big state banks last year.

Agricultural Bank of China and Industrial and Commercial Bank of China, two of the country’s largest state banks, said ⁠they planned to raise up to 160bn yuan and 100bn yuan respectively through private A-share ​placements to the finance ministry, China National Tobacco ​Corp and its subsidiaries.

The two lenders said the ​proceeds would be used entirely to replenish cash reserves, helping them ​sustain credit expansion, as Beijing leans ‌on state banks ​to support growth despite weak demand for loans.