China’s New Pension Investment Policy Could Lead to Corruption, Says State Media

The new investment policy of China’s pension systems — which allows a portion of funds to be invested in public markets — could lead to mismanagement and corruption, wrote one of the country’s most influential newspapers this week.

Previously, pension money could only be invested in treasuries and similar low-yield instruments. But a new rule allows a portion of the money to be invested in the country’s stock market.

It’s a new frontier that opens up the opportunity for mismanagement in a country where graft is rampant, according to the newspaper.

From Reuters:

The influential state-run newspaper Global Times said late on Tuesday in its English-language edition that announcement from the Ministry of Human Resources and Social Security’s (MOHRSS) decision to proceed with the plan has triggered concerns over the management of the pension funds.

“Managing the pension could be a problem since the funds are currently in the hands of local governments,” Peng Xizhe, dean of the School of Social Development and Public Policy at Fudan University was quoted as saying.

Mismanagement of public funds is known to be rampant.

More than one million have been punished for corruption between 2013 and this September, as president Xi Jinping pushes ahead with a nation-wide anti-graft campaign, according to party statistics, though many only get administrative punishments.


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