China’s Banks Approved To Start Individual Pension Businesses With New Participants

On November 18th, the China Banking and Insurance Regulatory Commission published rules allowing qualified banks and wealth management companies to start individual pension businesses. 

 According to the notice, 6 large banks, 12 shareholding banks, 5 city commercial banks, and 11 wealth management companies have been approved to launch a list of mutual fund products. Participants are able to buy personal pension savings, personal pension financial products, personal pension insurance products, and personal pension public fund products through individual accounts in pension funds. Among them, specific pension savings business issued by qualified commercial banks is included in the scope of purchase. Communist China created a social security system over 20 years ago, based on individual employment contracts that would make employers – and to a lesser extent, individual employees – primarily responsible for contributions to state-backed pensions, unemployment and medical insurance schemes. Basically, local and regional governments are responsible for managing these funds; however, due to the bureaucracy of the Chinese Communist Party (CCP) regime, it fails to do so and become the largest beneficiary. Therefore, insurance companies, banks, and securities companies have become agencies for the CCP to amass public wealth.