Chinese social security fund looks to expand investment horizons

The Chinese Government is considering the feasibility of investing the assets of the $375 billion Social Security Fund outside its current mandate of treasury bonds and bank deposits.

The China Daily reports the Ministry of Human Resources and Social Security is studying the feasibility of using the fund for market-based investment to gain a higher return.

The social security fund had assets of 2.39 trillion yuan at the end of 2010 (then $364.5 billion), and reports show its revenues have increased 29 per cent in the first three quarters of 2011.

A spokesperson for the ministry, Yin Chengji (pictured), says it was studying and making regulations on the investment of the social security fund.

“While we ensure the safety of the fund, we hope to gain a higher rate of return through investment,” the spokesman said.

Unlike the National Social Security Fund, which the central government set up in 2000 as a strategic reserve fund, the Social Security Fund can only be invested in treasury bonds and bank deposits.