China has allowed its social security fund to invest overseas. The National Council for the Social Security Fund opened an account on the Hong Kong stock exchange’s clearing system, which indicates that pension fund are now permitted to invest in offshore stock markets. The social security fund provides pensions to retired people, who pay a portion of their salaries into it while they are working. At present, the pension fund mainly invests in bank deposits, domestic bonds, funds and stocks. The fund has also gradually expanded into other areas. Recently, the fund invested CNY10 billion in the Bank of Communications Ltd to become its third largest shareholder. The fund has also acquired stake in the Bank of China, while it is negotiating with China’s largest lender, the Industrial and Commercial Bank of China to invest up to CNY10 billion.
