China pension fund hit by stock slump

The head of China’s national pension fund, the National Council for Social Security Fund, said the organization is facing "serious challenges" achieving an operating profit this year due to a slumping stock market, the Wall Street Journal reported. Dai Xianglong said this year’s decline in the value of the fund’s stock assets outpaced its realized income. The fund’s operating-income ratio, which measures investment returns, stood at 43.2% at the end of last year due to gains in local equities. Dai said the pension fund will increase investments in fixed-income products and keep a "stable proportion" in stock investments. The fund will also seek to make more direct equity investments in companies and is considering setting up new equity-investment funds. Dai made the comments in an interview published Monday in the state-run People’s Daily.