Joint ven­ture is the sixth-largest fund man­age­ment com­pany in na­tion

China Daily (Hong Kong) - - BUSINESS - By ZHONG NAN in Dalian, Liaon­ing zhong­nan@chi­nadaily.com.cn

Thomas Cheong, Prin­ci­pal’s VP and head for North Asia

Prin­ci­pal Fi­nan­cial Group, the Iowa-based pen­sion, in­surance and as­set man­age­ment ser­vice provider, hopes to be­come a share­holder in China’s pen­sion business after gain­ing 12 years of ex­pe­ri­ence in as­set man­age­ment in the coun­try, said its se­nior ex­ec­u­tives.

The group has worked with State-owned China Con­struc­tion Bank on the CCB-Prin­ci­pal Fund Man­age­ment since 2005.

The j oint ven­ture was the sixth-largest fund man­age­ment com­pany in the countr y last year. China is Prin­ci­pal’s third-largest mar­ket out­side the United States in terms of profit.

Renee Schaaf, the group’s se­nior vice-pres­i­dent, said that China’s pen­sion po­ten­tial is enor­mous. It is es­ti­mated that it will in­crease five­fold over the next 10 years from around $20 bil­lion to $100 bil­lion. The growth will come from the development of en­ter­prise an­nu­ity and vol­un­tary re­tire­ment prod­ucts.

“China has one of the fastest ag­ing pop­u­la­tions in the world, and this will put pres­sure on the govern­ment-run pen­sion sys­tem,” she said. “It is in­evitable that in­di­vid­u­als will need to take greater re­spon­si­bil­ity to pre­pare a nest egg for their re­tire­ment to en­sure they have enough at re­tire­ment.”

Ac­cord­ing to the Vir­gini­abased Global Ag­ing In­sti­tu­tion, China’s pop­u­la­tion of over 65-year-olds will grow from 10 per­cent in 2015 to 28

China has one of the fastest ag­ing pop­u­la­tions in the world, and this will put pres­sure on the govern­ment...” Renee Schaaf, se­nior vice-pres­i­dent of Prin­ci­pal Fi­nan­cial Group China’s po­ten­tial pen­sion as­sets after 10 years

per­cent by 2050. This seis­mic shift will put an enor­mous fis­cal strain on the govern­ment

Schaaf said there are many growth points for the group to in­vest in projects re­lated to the Belt and Road Ini­tia­tive, and its branches in South­east Asia have done well un­der the ini­tia­tive.

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