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China stresses safe investment of pension funds

Xinhua | Updated: 2017-03-02 09:27

China stresses safe investment of pension funds

An investor checks stock information at a brokerage house in Fuyang, Anhui province, February 24, 2017.[Photo/VCG]

BEIJING - A senior official Wednesday called for a cautionary approach when investing pension funds, tempering expectations that a large amount of pension funds would enter the stock market.

"The investment of pension funds does not necessarily mean putting them into the stock market -- that is just one of the choices," said You Jun, vice minister of human resources and social security, at a press conference.

Pension funds are the "lifeline" of ordinary people and the priority, should they be invested, is safety, You told reporters, adding that risks must be managed and investment returns ensured.

China is trying to increase the value of its locally managed pension funds to cope with the needs of its aging population.

Pensions are traditionally held by banks or used to purchase treasury bills. They are now allowed to be invested in a variety of financial products, including bonds and stocks.

Since the end of 2016, seven provincial-level regions have entrusted their pensions to the National Council for Social Security Fund (NCSSF) in the hope of more diverse and higher returns.

A total of 360 billion yuan ($52.33 billion) is being transferred from bank accounts across the country, operated by local authorities, to the NCSSF for investment, You said.

The move has been, and will continue to be, closely monitored amid calls for more long-term institutional investors to stabilize the market, which suffered plunges in the summer of 2015.

The government has set a 30 percent limit on the proportion of pension funds tied up in stocks.

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