China’s social security fund had a stellar 2019, racking up a return on investment of 15.5%, the highest in 12 years, as it benefited from a recovery in the country’s stock and bond markets, reported Caixin.
The figure was disclosed by Chen Wenhui, a vice chairman of the National Council for Social Security Fund (NCSSF), at a forum in Beijing on Saturday. The gain was almost double the average annual return of 8.15% earned since the fund was set up in 2000, and a stunning reversal of a 2.3% loss in 2018. The assets overseen by the council totaled RMB 2.6 trillion ($377 billion) at the end of 2019, Chen said, an increase of 18% over 2018 based on previously released data.
Chen didn’t elaborate on the returns, which he said exceeded RMB 300 billion, but he warned that the looming pensions shortfall will become one of the most pressing problems facing society. The country must plan ahead and take “effective measures” as soon as possible to avoid pensions becoming a “gray rhinoceros,” a term coined by author Michele Wucker to describe a highly probable, high-impact, yet neglected threat that occurs after a series of warnings and visible evidence.