October 2024

China sovereign wealth fund registers benchmark-beating return

China Investment Corporation (CIC) delivered a benchmark-beating return in 2023 on the back of putting greater emphasis on private assets such as private credits and green energy investments. CIC posted 6.57% of ten-year annualised net return as of year-end 2023, outperforming its long-term performance benchmark by 31 basis points, the sovereign wealth fund says in its annual report. The fund’s cumulative annualised net return was 6.23% since its inception in 2007. CIC says the global macroeconomic paradigm shift continued to evolve in...

China: Gradual increase to statutory retirement age

Employer Action Code: Act The government has approved legislation to increase the social security statutory retirement age by three to five years gradually over a 15-year period starting January 1, 2025. Key details Over the 15-year period starting January 1, 2025, normal retirement age (NRA) will gradually increase: From age 60 to 63 for men From age 55 to 58 for women in salaried positions From age 50 to 55 for women factory workers These are the first increases to NRA since the...

Fidelity International says fund sales surged on interest rate cuts, China market rally

Lower interest rates and a rally in China stocks have helped drive sales of investment fund products offered by Fidelity International, a senior executive said. “Following [the People’s Bank of China’s] stimulus package, China’s stock markets have been performing strongly, and we believe there is some room to grow,” said Charlotte Chan, the head of Fidelity’s Hong Kong office, in an interview. “Together with the Fed’s rate cutting cycle, this motivates investors to look at their allocations, especially those who...

September 2024

China’s retirement age reforms not enough to fix pension headache

China's move to raise retirement ages is a starting point to plug gaping pension deficits and bolster a shrinking workforce but more pain lies ahead as the economy slows, making further reforms urgent, say economists and demographers. Aging populations are a global phenomenon, but the issue is particularly stark in China due to the legacy of its one-child-policy, which was in place for three decades and has exacerbated its demographic challenges. China’s number of births dropped to 9 million last year and the...

When the Abundance Ends: Economic Transformation, Population Aging, and Shrinking Lifecycle Surplus in China

By Feng Wang, Ke Shen & Yong Cai China’s age of abundance, driven by rapid increases in labor income and a favorable population age profile, led to a sizable surplus at the society level. Using the National Transfer Accounts (NTA) approach, this study updates results published in this journal a decade ago. It traces changes in labor income and consumption patterns in China in the 2010s, and compares them with those in the decade prior. Our results report significant shifts...

Why China’s decision to extend the retirement age will not address fairness and sustainability issues

For many working Chinese, particularly those born in the 1980s and 1990s, Beijing’s decision to raise the retirement age by three years brings a sense of loss and betrayal. It means they have to work longer and pay more to get less from a major social contract. An internet meme that went viral reflected Chinese millennials’ frustration over the government’s flip-flop in birth and pension policies: “When I was born they said there were too many; when I gave birth...

China. Lawmakers review plan to raise retirement age in fast-greying China

China's top legislative body this week assessed an official plan to delay the country's retirement age, among the world's lowest, taking a key step towards changing decades-old labour laws and easing economic pressures stemming from a shrinking workforce. The ruling Communist Party said in July that China would gradually raise the country's retirement age. The retirement age is now 60 for men, about six years below that in most developed economies, while for women in white-collar work it is 55, and 50...

US. Pressure Mounts on Public Pension Funds to Divest Chinese Investments

As the world revisits decades of globalization and diminishes the interdependence and integration of the world’s economies, and as interests of China and its allies become less aligned with the interests of the U.S., Europe and their blocs, many institutional investors are caught between generating alpha and legislators who want their states’ funds to be completely divested from the world’s second-largest economy. Geopolitical worries have led legislators in several states to mandate that their state pension funds divest from Chinese...

China. More benefits could be doled out to incentivize couples to have more babies

Many countries in the world now face a shrinking, and simultaneously aging, population, which, if not promptly reversed or mitigated, could negatively impact the sustainable growth of their economies. A sufficient number of people is indispensable for running and reinforcing the operation of a functioning economy. Consequently, policymakers or relevant government authorities need to take note of the evolution of the ongoing changes of demographic patterns, and readjust and optimize their population policies so as to plan for a resilient...

August 2024

Gig economy is failing workers and needs urgent reform

In the recently released Chinese film Upstream, middle-aged lead Gao Zhilei, played by Xu Zheng, signs up as a food delivery driver to support his family after losing his white-collar job. Gao’s predicament is mirrored across the global working landscape where gig work has become a cost-effective way to fill temporary positions. The bulk of the work is in the food delivery, ride-hailing and home service sectors – a result of the emergence of app-driven, platform business models. But areas such as information...