Center

China to invest 100b yuan with pension fund

By Gu Jia (Shanghai Daily)
Updated: 2007-04-13 13:41

TheShanghaiComposite 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 inHong 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,ZhejiangProvince,HunanandFujian, 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.