BIZCHINA / Center
China to invest 100b yuan with pension fund
By Gu Jia (Shanghai Daily)
Updated: 2007-04-13 13:41
China's pension fund will invest a record 100 billion yuan (US$12.94
billion) in 2007, including a substantial amount in bullish domestic
stock markets.
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The National Council for Social Security Fund made the decision yesterday
as it harvested a 19.6 billion yuan profit from last year which had a 9.3
percent yield, mostly due to soaring stock prices, Xinhua news agency
said.
The Shanghai Composite Index, which tracks the mainland's bigger stock
exchange, soared to a record of 2,675.47 at the end last year, wrapping
up the year's rally at 130 percent. The Shenzhen Composite Index, which
covers the smaller one, climbed to 550.59.
The yield was higher than the sum of combined yields in the past six
years.
However, the investment in equities will be capped below 30 percent of
the total as limited by Chinese pension fund regulations.
"Safety and prudent investment remains our top priority," Xiang
Huaicheng, chairmen of the council, said yesterday.
China will have at least 220 million elderly people by 2030.
So "the fund needs to expand to one trillion yuan in five to 10 years to
be able to pay for the elderly," Xiang had said at an earlier meeting in
Hong Kong.
By the end of 2005, the national social security fund had amassed 606.6
billion yuan. The money is now operated directly by local labor and
social security bureaus.
Misuse of pension funds has been found in Shanghai, Ningxia, Beijing,
Tianjin, Zhejiang Province, Hunan and Fujian, with about 7.1 billion yuan
involved, Xinhua said.
A new pension management firm will be set up in Shanghai within one year
to run the city's more than 10 billion yuan of corporate annuities
following last year's scandal, which brought down the city's former Party
chief Chen Liangyu.
(For more biz stories, please visit Industry Updates)
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