Insurance reform to boost public welfare

The State Council, China's Cabinet, recently decided to transfer 10 percent equity shares of State-owned enterprises and financial institutions to the National Council for Social Security Fund. A pilot program for such transfers will be launched in some central SOEs by the end of this year, and gradually extended to other SOEs.

Under certain circumstances, the NCSSF could establish a pension fund management company to independently use the transferred assets. The council can receive only equities and earn dividends on them but cannot take part in the management of the SOEs or financial institutions concerned.

This is the third round of reform aimed at transferring SOEs' assets to the NCSSF since 2001, when the central government first decided to reduce its holdings in SOEs to raise funds for the NCSSF. The second round of reform was launched in 2009.