China to set up US$1.72 billion state pension company in response to rapidly ageing population

Seventeen bank-affiliated wealth management units, insurers and state institutions will take stakes in the company

In May, census data showed citizens aged 65 or more made up 13.5 per cent of the 2020 population of 1.4 billion, jumping from 8.87 per cent a decade ago

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In May, census data showed citizens aged 65 or more made up 13.5 per cent of the 2020 population of 1.4 billion, jumping from 8.87 per cent a decade ago. Photo: AP

Published: 1:39pm, 19 Aug 2021Updated: 2:10pm, 19 Aug 2021

China plans to set up a state pension company with registered capital of 11.15 billion yuan (US$1.72 billion), a filing showed on Thursday, the latest step by the world’s most populous nation to boost funds for its citizens’ retirement.

China is wooing booth public and private sector involvement as it tweaks its US$1.2 trillion pension system for a rapidly ageing population faced with the prospect of underfunding.

Seventeen bank-affiliated wealth management units, insurers and state institutions will take stakes in the company, whose largest shareholders include the wealth management units of China’s big five banks, each with a stake of 8.97 per cent, the filing by the Insurance Association of China showed.

The new company will manage commercial pension funds, short-term and long-term health insurance, and entrust yuan or foreign currency-denominated assets to other asset managers for retirement purposes, the filing showed.

In May, census data showed citizens aged 65 or more made up 13.5 per cent of the 2020 population of 1.4 billion, jumping from 8.87 per cent a decade ago.

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