Date
23 August 2017
CHINA INSURANCE PENSIONS

The Big Picture: PENSION FUND

The central government has raised the pension plan by 10 percent from January this year, the State Council said in a statement after a weekly meeting chaired by Premier Li Keqiang {李克強} on Wednesday. More than 74 million retirees are expected to benefit from the move.

The underprivileged will be granted extra subsidies, the cabinet said. The government will take proactive measures to ensure that retired people will be able to receive their pension on time. It will also establish a mechanism to fine-tune the pension plans.

It is the 10th consecutive year for the country to lift the pension plan since 2005. The average pension per month is about 2,000 yuan (US$328), compared with 700 yuan before 2005, data from the Ministry of Human Resources and Social Security shows.

Although the increase is significant, the pension plan is still not enough to provide for the basic needs of retirees amid rising prices, observers said. Some first-tier cities may have to keep raising their pension plans over the next decade to maintain social stability.

It is not a rare sight for retirees to gather at the front gate of the state-owned companies where they had spent most of their productive years to complain that the retirement packages they received a decade ago are simply not enough to pay their bills.

Fu Chengyu {傅成玉}, chairman of China Petroleum & Chemical Corp. (Sinopec Corp.) (00386.HK, 600028.CN), once suggested that retirees be granted a one-off payment from the Social Security Fund to resolve the problem. State-owned companies should contribute a larger part of their profits to the Social Security Fund in order to meet the needs of the nation’s elderly in the coming decades, Fu said in March last year.

China set to unveil new services trade policy

The government is expected to publish a new policy to promote the country’s services trade, the China Securities Journal reported Thursday, citing industry sources. The measures are intended to speed up exports of services. These include allowing outsourcing contractors to raise funds directly from the market and preferred tax rates for qualified service exporters, according to the newspaper. Outsourcing companies won offshore contracts worth US$53.41 billion in the 11 months to November, up 47.8 percent year on year, official data shows. The Ministry of Commerce is targeting US$85 billion by 2015, the report said.

Regulator presses major banks on disclosure

The China Banking Regulatory Commission wants major banks to release detailed information on key aspects of their operations, the China Securities Journal reported Thursday, citing new guidelines. These include off-balance sheet assets, evaluation standards and global business interests. Banks considered systemically important in the previous fiscal year or those having balance sheet assets worth more than 1.6 trillion yuan (US$264 billion) during the period must file the information no later than July 31 each year. Thirteen banks are covered by the guidelines, including Industrial and Commercial Bank of China Ltd. (01398.HK, 601398.CN), Agricultural Bank of China Ltd. (01288.HK, 601288.CN), Bank of China Ltd. (03988.HK, 601988.CN) and Bank of Communications Co. Ltd. (03328.HK, 601328.CN), the report said.

– Contact HKEJ at [email protected]

JP/AC/CG

 

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