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

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.