Pension Fund to be Invested

China plans to hand over a massive swathe of funds destined to finance Chinese pensions, to professional investors.

Every month, 24,000 Chinese enterprises and their employees pay money into a corporate annuity fund, one of the pillars of the country's fledgling insurance system for retirees.

The corporate annuity fund, which covers 9.64 million people, had 91 billion yuan in assets at the end of 2006, but only 15.8 billion yuan was being handled by professional investors--endowment insurance companies, commercial banks and other qualified investors.

By the end of this year, after a further 75 billion yuan has been transferred, the whole fund will be in the hands of qualified investors.

The time is ripe for handing over the remaining 75 billion yuan to qualified investors because the prospects of the capital market are good, stricter supervision is in place and investment risks are under control, said Zuo Xiaolei, chief economist with Galaxy Securities.

Boom Year for Listed Firms

A total of 680 Chinese mainland-listed firms which have unveiled annual results, posted a 42.2 percent rise in collective profit for 2006 as China's economy continued to expand, industry data showed on April 4.

These firms achieved net income of 130.5 billion yuan last year, against 91.8 billion yuan in 2005, according to data compiled by the Shanghai Securities News and Wind Info Co.

Earnings at the mainland's 1,400-plus public companies would likely come in at more than 400 billion yuan for last year, an all-time record high, the Shanghai Securities News said, citing its own calculation.

Chery on Top

Chery Automobile Co. said on April 4 that it has become the first domestic car maker to beat the country's foreign joint ventures in the monthly vehicle sales race.

Anhui Province-based Chery, China's fourth-largest car maker by sales last year, sold 44,568 units in March, a year-on-year increase of 69 percent, the company said in a statement.

Shanghai General Motors (SGM) lost its No.1 spot by selling 40,570 vehicles last month. Shanghai Volkswagen sold 38,627 units, and FAW-Volkswagen Automotive sold 37,016, Chery said, citing industry statistics.

Chery, strong in building small-engine vehicles, sold a record 15,294 QQ compacts in March, which are half the price of the compacts offered by SGM.

It was the first time Chery's monthly sales topped 40,000, even as SGM and Shanghai Volkswagen offered significant discounts.

Reform SOEs

China will further decentralize its major state-owned enterprises (SOEs), encouraging them to go public as single entities and inviting in strategic investors, according to senior economic officials.

China will diversify the ownership of centrally-administered SOEs whose operations do not involve national security or in which private and foreign investment are not forbidden, Li Rongrong, head of the State-owned Assets Supervision and Administration Commission said in a bylined article in Party magazine Qiu Shi.

Li said that a major task for 2007 was to promulgate regulations "as early as possible" to standardize the management and transfer of state-owned shareholdings of listed companies.

However, economic observers said stock market listings and shareholder reform would diversify ownership but do little to weaken industrial monopolies, which cover electricity, telecoms and railway transportation in China.