China to roll out private pension scheme nationwide

Explaining the importance of the official launch of China's private pension program...

Over 521 million covered by public pension for urban employees. Even if half of them (260.5m) availed of this private pension plan and contributed just half of the maximum allowable ($826), that would generate a $215 billion-a-year pension contribution flow.

With interest rates on the decline in China due to Beijing's monetary loosening measures, more of that private pension cash will flow into higher-yielding investments like the stock market.

"Under the new policy, domestic workers covered by the nation's basic pension insurance system can voluntarily open their private pension accounts and can deposit up to 12,000 yuan ($1,652) per year into the accounts. The payments can be made monthly or yearly.

"People joining the private pension scheme can enjoy some preferential treatment such as tax reduction and can also use the money in the account to purchase financial products."