China will allow foreign fund management companies to help manage
part of China's US$6 billion pool of social security funds, a
report said Tuesday.
Liu Jiafu, vice director of the Debt and Finance Department of the
Ministry of Finance, said when the government gives the go-ahead
for some of the pension funds to be invested in domestic stocks,
foreign firms will be allowed to manage a portion, the Business
Weekly magazine said.
Liu said the draft regulations on stock market investment by social
security funds have been sent to the State Council for final
approval and that if "everything goes smoothly, the regulation will
be unveiled before October", he said.
The "regulation will outline a detailed policy for the involvement
of foreign fund management companies in the market," he said.
Foreign and domestic companies would be treated on "an equal
footing" with the selection of candidates to manage the funds being
made by the State Social Security Fund Management Council.
The vast bulk of China's pension funds are currently held in bank
deposits and treasury bonds, which generate very low yields.
China has begun a drive to reform the system to allow pension plans
to pay higher returns in future while curbing financial risk.
(China Daily 06/26/2001)