As Beijing seeks to expand its pension system it will need to find ways to simplify how the system is managed, instead of maintaining the set of watchdogs that currently have a say.
China’s former central bank governor Zhou Xiaochuan has spoken in favour of letting pension funds invest overseas, a sign senior officials are considering such a move.
If the state pension fund is empowered to push for better ESG standards by local companies, it could help turbo-fuel China's apparent ambitions as an environmentally conscious nation.
After a two-year trial run, the ambitious scheme is being extended nationwide. Investment restrictions and built-in home bias, though, could undermine its effectiveness.
China’s national pension fund will play a greater role in helping local governments grow their pension assets. This should also benefit external asset managers.
Industry experts say a proposal by a member of China’s top advisory body to allow the state retirement fund to invest more in equities should be extended to overseas stock purchases as well.