Managers of China's massive social security fund are waiting for the "right time" to invest in overseas capital markets, but the initial investment will not be huge, according to a senior official yesterday.

"We are choosing the right time to make an overseas investment," Xiang Huaicheng, chairman of the National Council for Social Security Fund, said.

"The initial investment will not be a big one, but it (the investment scale) will expand gradually," added Xiang, also China's finance minister from 1998 to 2003.

Xiang made the remarks yesterday at the two-day 2005 Asian Pension Fund Roundtable, which ends today.

He said the council has already begun preparing for its overseas investment project, which has been a hot topic in financial circles for months.

But the former finance minister admitted that details of the project have yet to be approved by the State Council, China's cabinet, which last February gave an in-principle green light to the project.

Earlier media reports said the fund would make its first investment as early as July this year.

However, this never happened, raising suspicions among some market watchers that the council might have met with serious setbacks.

Cheng Weiqing, a fund analyst with CITIC Securities, said stagnation in the domestic stock markets might have been the reason for the delay.

"At a time when many are blaming the bearish market on a shortage of funds, the council and the government as a whole faces pressure if they divert funds into foreign markets, which could have made them more cautious about moving on with their overseas investment plan," Cheng said.

The council, which was set up in 2000, had 192.1 billion yuan (US$23.7 billion) of assets as at the end of last month.

It had made 115 billion yuan (US$14.2 billion) in investments in the domestic capital markets by the end of September.

Established in 2003, the annual Roundtable aims to discuss issues facing Asia's pension funds industry.

It is organized by the Asian Foundation, and the Pacific Pension Institute, two US-based non-profit organizations.

This year's event has attracted participants from 23 countries. The theme for this year's roundtable was "Demographic pressures in Asia, Driving retirement system reform, and Capital market development."

(China Daily November 10, 2005)