FW: China's social security funds are ready to enter the stock market

["Vic Thorpe" <just.solutions@pandora.be>]

-----Original Message-----
From: bounce-workers-capital-l-13251@forum.icftu.org
[mailto:bounce-workers-capital-l-13251@forum.icftu.org]On Behalf Of Jon
Robinson
Sent: 21 January 2002 14:49
To: Forum on Workers' Capital (ICFTU/ITS/TUAC)
Subject: China's social security funds are ready to enter the stock
market


Please find below a short press report indicating the future potential
impact of the Chinese social security funds on the world's financial
markets, albeit with a 40% limit on the amount invested in equities.
Initially these funds could amount to US$7.5 billion, according to the
article from AsiaPulse dated 17/01/02.
 ----------------------------------------
Jon Robinson - ICFTU
Tel +44 (0) 207 467 1224
Fax +44 (0) 207 1317
mailto:jrobinson@tuc.org.uk
----------------------------------------


CHINA'S PENSION FUNDS TO ENTER STOCK MARKET

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Story Filed: Thursday, January 17, 2002 3:54 AM EST
BEIJING, Jan 17, 2002 (AsiaPulse via COMTEX) -- China's social security
funds are ready to enter the stock market.
China Daily reports that preparations are in the final stage as the
newly founded National Executive Council of Social Security Funds, legal
keeper of the country's welfare and pension funds, has published
application requirements for investment institutions bidding to run the
funds.
The Ministry of Finance and the Ministry of Labor and Social Security
have jointly released a provisional rule that only 40 per cent of the
funds can be used to buy shares in the secondary market.
Experts said the accession of the funds will be a win-win solution for
both the market and for the social welfare system in the long run.
Practice of Western capital markets has proven that social security
funds are most important institutional investors that play an anchor
role in maintaining the stability of the market.
The number of elderly people in China is estimated to peak around year
2030.  Buying stocks will optimize the investment portfolio of China's
social security funds, which used to be dominated by less profitable
bank deposits and treasury bonds.
About 61.6 billion yuan (US$7.5 billion) worth of funds will flow to the
secondary market in the initial stage, a trivial sum compared with more
than 4 trillion yuan (US$483 billion) of the overall value of the
market.
Experts also said how to appreciate the social security funds still
remains a prominent question.
(XIC)

(c) 2002 Asia Pulse Pte Ltd


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