Rules of engagement for funds

Provincial social security funds in China are invested very conservatively and have earned just 2 percent a year over the last 10 years or so. There is a need to boost the returns on these funds in order to finance the defined benefits without increasing contributions. At the end of March, the Guangdong provincial social security bureau decided to let the National Council for Social Security Fund manage around one-third of its funds, 100 billion yuan ($15.86 billion), as the NCSSF has made returns of around 9 percent a year.

This article, published in China Daily, discusses a number of questions that remain unanswered concerning the rules of engagement.