China pension fund allowed to invest in stock market - China.org.cn
China’s State Council published the final guideline on investment for the country’s massive pension fund on Sunday, effectively opening the gate for its investment into the stock market.
The final plan, released after considering public opinion, allows the pension fund to be invested in new products, including domestic stock markets, but restricts the maximum proportion of investments in stocks and equities to 30 percent of total net assets.
The fund will also be used to participate in major projects and purchase shares in state-owned enterprises to gain long-term yields.
Provincial-level governments determine the capital amount to be invested first and only the institutions authorized by the State Council can operate such capital. All details shall be reported to the Ministry of Human Resources and Social Security and the Ministry of Finance.
The guideline will be effective since the day it’s published.
The fund for retirees, which began operation in the early 1990s, has aroused concern as its annualized investment yield hovered as low as around 2 percent over the past several years, falling short of the consumer price index, a main gauge of inflation.
China’s pension fund depreciated by nearly 100 billion yuan in the past 20 years, taking inflation into account, said Zheng Bingwen, an expert from the Chinese Academy of Social Sciences.
The stock market will help avoid the diminishing value of pension fund and stabilize the country’s capital market, said Li Daxiao, chief economist with Yingda Securities.
#Chine #Bourse #Fonds_de_pension