养老保险基金应该投资资本市场吗?

Ahead of this year's two sessions, Zhao Qizheng, spokesman for the annual session of the National Committee of the Chinese People's Political Consultative Conference, or the CPPCC, pointed out that China faces a serious issue of getting old before it gets rich.

"Normally, countries become aging societies after their per capita GDP reaches ten thousand US dollars. In China, our per capita GDP is only 3000 dollars at the moment; however, China is already an aging society. I think this calls for serious attention from the government and society."

The amount of people aged 60 or above in China hit 185 million by the end of 2011, or 13.7 percent of the nation's total population.

Meanwhile, about 2 trillion yuan, or 317 billion US dollars worth of pension funds lay scattered across the nation, sitting in low-yield financial instruments; shrinking day by day due to negative interest rates caused by stubbornly high inflation.

China's securities regulator is currently studying a plan which would see pension funds invested in China's capital market in an effort to better manage the pensions and help lift the market as a whole.

During a group discussion within the CPPCC, Chairman and President of the Export-Import Bank of China, Li Ruogu, told reporters he supports the notion of investing pension funds in the capital market.

"This is very common practice in other countries; the key is supervision. I think there's no hurdle in investing pension funds in the capital market. But there should be restrictions on the investment proportion and products. If losses were made, pensioners are going to greatly affected."

As a major component of China's capital market, the stock markets saw big losses in 2011- the shanghai composite posted a near-zero growth compared with ten years ago.

Given the fact that stock markets in China are still 'immature,' national advisor Liu Kegu suggests that pension funds should not be invested in stocks.

"An investor's purpose is to make profit. First, the market should be able to provide a long-term stable profit with a relatively high probability. The profit can be very small but it definitely shouldn't amount to long-term losses. Secondly, in theory, the long-term average return on capital should at least be higher than the rate of return for savings. If you cannot guarantee this, pension funds, upon which society will depend on in the future, should not be allowed to enter the market."

The former vice governor of China Development Bank also points out that the larger the fund is, the more difficult it will be for it to avoid risks; hence the smaller the chance to maintain high and stable returns. Therefore, it is important to start off by investing a small portion and be aware of any changes in quantity.

For CRI, this is Ding Lulu.