Pension funds to be used for ailing stock market
China is allowing its pension funds to invest up to 600 billion yuan ($97 billion) in the country’s struggling equity market.
The funds will be able to invest up to 30 percent of their net assets in the stocks, equity funds and balanced funds, according to rules published by the State Council, or cabinet. The rule was published on Sunday after shares slumped by nearly 12 percent last week, the worst weekly performance since June.
China’s pension funds account for about 90 percent of the country’s social security fund pool and had net assets of 3.5 trillion yuan by the end of last year, according to the Ministry of Human Resources and Social Security
The funds were previously only allowed to be deposited in banks or invested in Treasury bonds, which give very low yields.