China expanding private pension scheme to raise pension awareness: industry insider

China's nationwide roll-out of a private pension scheme is set to raise public awareness on the importance of pensions and improve the financial wellbeing of people in their retirement, according to industry insiders.

China on Thursday announced the expansion of a private pension scheme from 36 pilot cities and regions to the entire country, effective from Dec. 15.

Serving as supplementary pension insurance, this scheme is voluntary for individuals and operated in a market-oriented manner with support from national policies, according to a notice jointly issued by five government departments including the Ministry of Human Resources and Social Security.

People who currently contribute to basic pension schemes for urban employees, non-working urban residents and rural residents can all participate in the private pension scheme, according to the notice.

The scheme allows participants to contribute up to 12,000 yuan (about 1,670 U.S. dollars) annually to their private pension accounts, and offers them tax incentives.

Insurance industry insiders said following the expansion, financial institutions are set to offer more varieties of products to meet diversified needs of individuals, and public awareness of the importance of pensions will be raised.

"All kinds of financial institutions will build a differentiated and diversified product system around the diverse pension financial needs of people throughout their life cycle, and provide customized and quality comprehensive services, especially for those who have been involved in flexible employment and new forms of employment. This will further raise people's awareness of the importance of pensions," said Wang Jing, the head of the market channel department at Guomin Pension.

The private pension scheme, launched in November 2022, was piloted in 36 cities and regions including Beijing, Shanghai and Guangzhou.

More than 70 million private pension accounts have been opened under this scheme so far, while the number of investment products has exceeded 800.

Financial products, such as wealth management products, savings deposits, commercial pension insurance and public funds, have been offered under the scheme.

China expanding private pension scheme to raise pension awareness: industry insider

China's yuan-denominated loans rose by 17.1 trillion yuan (about 2.35 trillion U.S. dollars) in the first 11 months of the year, central bank data showed on Friday.

The M2, a broad measure of money supply that covers cash in circulation and all deposits, increased 7.1 percent year on year to 311.96 trillion yuan (over 42 trillion U.S. dollars) at the end of November 2024, according to the People's Bank of China.

Outstanding yuan loans reached 254.68 trillion yuan (over 35 trillion U.S. dollars) at the end of November, an increase of 7.7 percent year on year. Meanwhile, outstanding social financing, a measurement of funds that individuals and non-financial firms receive from the financial system, stood at 405.6 trillion yuan (over 55 trillion U.S. dollars) at the end of November, up 7.8 percent year on year.

Key sectors demonstrated robust loan growth during the period: the balance of medium- and long-term loans to the manufacturing sector grew by 12.8 percent compared to last year; outstanding loans granted to "little giant" firms (those which use special and sophisticated technologies to produce novel and unique products) jumped by 13.2 year on year; outstanding inclusive loans for micro and small businesses recorded a 14.3 percent annual growth.

This growth highlighted an improving credit structure, with social expectations and market confidence showing signs of recovery, according to Zhang Jiqiang, Head of Research at Huatai Securities.

Interest rates for new loans continued to decline in November. The weighted average interest rate for newly issued corporate loans dropped to 3.45 percent, 36 basis points lower than the same period last year. The rate for new individual housing loans fell to 3.08 percent, down 92 basis points year-on-year.

China's just concluded Central Economic Work Conference pledged to adopt a moderately loose monetary policy next year. Wang Yifeng, deputy director of the Research Institute at Everbright Securities, noted that this policy stance is expected to provide substantial support for the real economy, with a greater focus on driving consumption and improving people's livelihoods.

China's yuan loans surge by 17.1 trillion yuan in first 11 months

China's yuan loans surge by 17.1 trillion yuan in first 11 months