China’s pension funds post surge in investment returns in 2020
Chinese pension funds posted an investment return rate of 15.84% last year, nearly doubling the 20-year average of 8.51%, a report from the National Council for Social Security Fund showed on Wednesday, partly due to a jump in domestic stock markets.
China, the world’s most populous country, has been looking to boost its investment returns and size of its pension funds, to cope with a looming demographic crunch as population growth slows.
To counter the economic impact of rapid ageing and the resulting shortfall in pension funds, the government has relaxed its family planning policy, allowing couples to have up to three children, and said it would gradually delay its national retirement age.
Despite the upbeat investment returns, Chinese pension funds had a deficit of over 600 billion yuan ($93 billion) last year, due to tax cuts to help struggling firms amid COVID-19, according to the financial magazine Caixin.
The Wednesday report showed 65% of the National Social Security Fund’s total assets were entrusted to other fund houses and asset managers. In terms of investment targets, domestic asset holdings accounted for about 90% of the total assets held, it said.
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