SSF to raise investment in real economy

The National Council for Social Security Fund will increase investment in the development of the real economy development with investable funds between 2012 and 2015 up to 250 billion yuan ($39.6 billion), according to a statement released on its official website on Monday.

By the end of 2011, the SSF had managed funds totaling 868.8 billion yuan with 137.6 billion yuan being invested in industrial development, the statement said.

According to Chinese regulations, the SSF can have two kinds of real economy investment: direct equity investment in central enterprises and investment in venture capital and private equity funds registered with or approved by National Development and Reform Commission.

The amount for direct investment in central enterprises can be up to 20 percent of the entire SSF funds and the investment in VC and PE funds can account for 10 percent at most.

The real economy is the part of the economy that is actually producing goods and services, as opposed to buying and selling on the financial markets.

The statement said the SSF will strengthen cooperation with central enterprises and positively become their strategic investor and hold shares when these enterprises get listed or are restructured, reorganized or refinanced.

The SSF is studying methods of preferred stock investment in central enterprises that guarantee steady returns.

By the end of 2011, the SSF had invested about 87 billion yuan in central enterprises including the Bank of Communications Ltd, Industrial and Commercial Bank of China Ltd, Datang Telecom Technology & Industry Holdings Co Ltd and China National Aero-Technology Import and Export Co, the statement said.

The SSF also committed to invest 19.7 billion yuan and had invested 12.5 billion yuan in 13 venture capital and private equity funds by the end of 2011.

caixiao@chinadaily.com.cn