Pension fund to get huge boost
By Han Xiao (China Daily)
Updated: 2006-10-26 08:47
"And I don't think the influx of those shares was the fundamental reason for the
collapse of the stock market four years ago," Chang added.
CSRC Vice-Chairman Fan Fuchun told reporters during the annual session of the
National People's Congress in March that the plan to transfer SOE shares to the
national pension fund was proceeding smoothly.
He also implied that the sale of those shares would be prohibited for a given
period of time to prevent a flood of shares going on the market at once.
Statistics show that China currently has over 1,300 listed companies, among
which 900 are State-controlled or with the State holding a stake in them. The 10
per cent allocation from all listed SOEs means that around 340 billion shares
would be transferred to the national pension fund.
Experts believe the share transfer could be the first step in a broader
injection of State assets into the pension system.
For the past year, State-owned companies listing overseas have been required
to allocate 10 per cent of new shares to the National Council for Social
Security Fund, the central government-run pension fund.
SASAC and the Ministry of Finance are also working on a proposal to ask SOEs
to pay dividends, in order to raise funds to strengthen the social security
network.
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