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RFA: China Denied that Investing Trillions in Pension Funds Was to Save the Stock Market

RFA reported that China stated it had planned the investment of two trillion yuan in pension funds in the stock market in order to grow their value. It denied that the move was to save the stock market. The investment of pension fund money in China, until recently, was limited to bank savings and Treasury bonds. The new regulation allowed the pension funds to be invested in stock and in mutual funds but the ratio for investing in stock is capped at 30 percent of the total. RFA reported on interviews it had conducted on this issue. Some of those interviewed expressed concern about the corruption in the stock market. Some thought that it was a risky move because China’s stock market is just not well regulated. Another concern was that Chinese people don’t have control over how the pension funds are managed even though they are the beneficiaries. According to the 2014 Chinese Pension Development report that the China Academy of Social Science published, due to mismanagement, pension funds, social security funds, and savings have lost close to 17.5 billion yuan. Some reports indicated that the government used the pension funds for funding the government.

Source: Radio Free Asia, August 28, 2015