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China Expands Social-Security Fund Investments to Local-Government Debt

The new rules allow the fund to invest up to 20% of its portfolio in local-government debt and corporate bonds, according to a statement on the main government website. Previously, the fund was allowed to invest up to 10% of its portfolio in corporate debt, but not in local-government debt.

The measures will enable the fund to “appropriately expand the scope of investments, diversify risk and make a stable increase in its investment returns,” according to the statement.

China has been trying to boost the returns of its social-security fund, which has long had its investment largely confined to bonds, bank deposits, stocks and mutual funds. The fund’s assets reached 1.235 trillion yuan ($199 billion) as of last year, up 11.4% over the previous year.