China plans to launch a new public pension fund

Madrid

10/03/2021 – 20:29-
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China is planning to take new measures to tackle one of the biggest problems facing states with aging populations: retirement pensions.

The giant Asian is concerned about a future in which saving is becoming increasingly distant from what is necessary for retirement, and seems to be convinced of the need to create a new public pension fund to face this problem in the coming decades.

According Bloomberg, the Banking and Insurance Regulation Commission of China is taking the first steps to create a new public pension fund, in which state banks and insurers would participate as shareholders. The sources of the agency do not detail what the shareholding structure would be like, or other data such as the size of the fund, since these are questions that have yet to be decided.

The country already launched a pension fund in 2000, the National Social Security Fund (NSSF), a tool with which it has not raised enough funds to attack the problem of future pensions with effectiveness: at the end of 2019, the fund had a size of 2.6 trillion yuan, about 330,000 million euros, approximately, an amount that is not enough to be able to face the rest that lie ahead.

Keep in mind that citizens of retirement age in China, the country with the most population on the planet, still ahead of India, aims to reach 300 million by 2025, according to the China Insurance Association, which also warns that in a decade the difference between spending on pensions and savings for retirement will reach 1.5 trillion dollars.

The importance of public pension funds is great for the markets. In some cases they have reached a size that places them among the largest investors on the planet, exceeding one billion euros of assets in the case of the Japanese public fund, and also the Norwegian.

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