CSRC Vice-Chairman Fan Fuchun told reporters during the annual session of the National People's Congress in March that the plan to transfer SOE shares to the national pension fund was proceeding smoothly.

He also implied that the sale of those shares would be prohibited for a given period of time to prevent a flood of shares going on the market at once.

Statistics show that China currently has over 1,300 listed companies, among which 900 are State-controlled or with the State holding a stake in them. The 10 per cent allocation from all listed SOEs means that around 340 billion shares would be transferred to the national pension fund.

Experts believe the share transfer could be the first step in a broader injection of State assets into the pension system.

For the past year, State-owned companies listing overseas have been required to allocate 10 per cent of new shares to the National Council for Social Security Fund, the central government-run pension fund.

SASAC and the Ministry of Finance are also working on a proposal to ask SOEs to pay dividends, in order to raise funds to strengthen the social security network.

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