China should transfer more SOE assets to state pension fund-regulator

BEIJING Wed Nov 28, 2012 12:03pm GMT

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BEIJING (Reuters) - China should transfer a greater proportion of shares in its listed state-owned firms to the state pension fund, its securities industry watchdog chief said on Wednesday.

Guo Shuqing, chairman of the China Securities Regulatory Commission, suggested raising to between 30 and 50 percent the proportion of state-owned firms' listed shares held by the social security fund, from the current 10 percent.

"I suggest that we should transfer more state assets, including some assets of state banks and state-owned insurance companies, to the national social security fund," Guo told a business forum in Beijing.

"In the past, we transferred 10 percent of their shares to the fund, but I feel that we could raise the proportion to 30-50 percent, because the government should not hold so many corporate assets."

The National Social Security Fund managed assets worth 869 billion yuan (87.35 billion pounds) at the end of 2011, and plans to expand its asset base to 1.5 trillion yuan by 2015, its chairman said earlier this year.

Most shares of state-owned enterprises are now freely floated after reforms several years ago, but are nonetheless still held by other state-owned entities. Any transfer would therefore be unlikely to affect the market price of shares.

China's stock market is in the doldrums, with the main index in Shanghai .SSEC hitting its lowest point in four years this week.

An increase in the pace of reform of China's financial sector, including the rules for initial public offerings of shares, is widely anticipated by investors after China's new political leadership was unveiled earlier this month.

Guo said earlier this month that China plans a nearly three-fold jump in quotas for the Renminbi Qualified Foreign Institutional Investor (RQFII) scheme, which permits qualified investors to channel offshore yuan funds into mainland stock and bond markets.

The securities regulator also said that the quota for the Qualified Foreign Institutional Investor (QFII) scheme - the original, dollar-denominated program that allows institutional investors to buy stakes in Chinese-listed stocks or bonds - could be lifted if its current, 80 billion yuan ($12.81 billion)limit is reached.

(Reporting By Aileen Wang and Lucy Hornby, Editing by Jonathan Thatcher)

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