Financial institutions ramp up product offerings following expansion of private pension scheme

Chinese banks and insurance companies are stepping up efforts to launch new investment products and enhance related services to accommodate the growing demand for retirement planning following the country's expansion of the private pension program.

Starting December 15, China officially expanded its private pension scheme from 36 pilot cities and regions to the entire country.

As a supplementary pension insurance, this scheme is voluntary for individuals and operated in a market-oriented manner through support from national policies, according to a government notice. The notice encourages financial institutions to develop products that cater to long-term pension needs, such as personal pension savings and low-volatility or absolute return funds.

The China Securities Regulatory Commission (CSRC) has included the first batch of 85 equity index funds in the catalog of approved investment products for private pensions.

"We are planning to launch 27 [index fund] products on Monday, with that number increasing to 57 by next week. Our goal is to introduce eligible investment products under the private pension scheme as quickly and extensively as possible," said Zhang Xiaojing, senior manager of personal digital finance at Bank of China.

"Financial institutions including insurance companies will pay more attention to the diversified pension financial needs of residents throughout their life cycles. They will create a differentiated, diversified product system, especially expanding services for workers in flexible employment and emerging sectors," Wang Jing, director of Market and Channel Department at Guomin Pension, a firm established in 2022 under government guidance to support China's response to the enlargement of the country's aging population.

Meanwhile, the notice calls on financial institutions to enhance their service levels. Commercial banks are now required to provide more personalized services for participants changing their pension account bank or receiving their private pensions.

"We have developed a one-stop service system covering account opening, deposits, investments, asset growth, and withdrawals. We were among the first to launch a full range of investment products, including deposit funds, insurance, and other wealth management options. In addition, we introduced innovative services such as a tax-saving calculator, pension planning, and asset diagnosis for better asset allocation," said Jin Hua, deputy general manager of the Personal Financial Services Department at Industrial and Commercial Bank of China (ICBC).

Analysts said the nationwide roll-out of the private pension system will spur more innovation in financial products and services.

"The expansion of the private pension scheme will create more opportunities for financial institutions in terms of account opening and product sales, stimulating further innovation in products and services. Generally, for investors nearing retirement, stable options such as deposits and treasury bonds are recommended, while younger investors are advised to allocate more assets to finance products such as funds," said Dong Ximiao, chief researcher at Merchants Union Consumer Finance Company (Zhaolian Finance).

Financial institutions ramp up product offerings following expansion of private pension scheme

The U.S. Department of Commerce has issued new guidance declaring that the use of Huawei's Ascend AI chips "anywhere in the world" may violate U.S. export control regulations.

The statement, released by the department's Bureau of Industry and Security on Tuesday, explicitly warns of the potential consequences of enabling U.S.-origin "AI chips to be used in training or inference for Chinese AI models."

In response to the statement, the Chinese Ministry of Commerce vowed on Thursday to take resolute measures to safeguard the legitimate rights and interests of Chinese enterprises.

While the move aligns with Washington's broader strategy to curb China's access to advanced semiconductor technologies, it also underscores a deeper anxiety: the fear of losing its global leadership in artificial intelligence.

NVIDIA CEO Jensen Huang said that China is "not behind" the U.S. in artificial intelligence and called the race in AI development a "long-term, infinite race," as he spoke to reporters at a tech conference in Washington, D.C., last month.

During a recent congressional hearing, U.S. tech leaders, including OpenAI CEO Sam Altman and executives from Microsoft and chipmaker Advanced Micro Devices, testified on Capitol Hill to urge lawmakers to streamline policy for AI-related projects and fundraising in order to race against China in AI development.

The latest guideline follows a period of regulatory volatility. After walking back the previously announced "AI Diffusion Rule" from the Biden administration, the U.S. has now pivoted toward this more aggressive interpretation – a shift that highlights the inherent difficulties in enforcing such extraterritorial bans.

Convincing sovereign nations to follow U.S. law, particularly when it limits their own tech development, poses significant diplomatic and operational challenges.

"The Trump administration will pursue a bold, inclusive strategy to American AI technology with trusted foreign countries around the world," Tuesday's statement says.

Implementing a global enforcement regime would likely require bilateral negotiations with dozens of countries – a time-consuming and politically fraught process that risks diminishing returns.

In practice, these efforts may only reinforce China's determination to achieve technological self-sufficiency. Huawei's trajectory stands as a case in point.

Since coming under U.S. sanctions in 2019, the company has made notable advances in AI and chip development. Most recently, the company invited select Chinese tech companies to test its most powerful processor yet, the Ascend 910D, the Wall Street Journal reported, citing sources familiar with the matter. The chip is expected to rival – or even surpass – Nvidia's H100 in performance.

If such innovation continues to emerge under pressure, Washington may need to ask itself: Is the goal to contain China or to compel it to innovate faster?

New US guidance on Huawei chip usage reveals deeper fears, tougher realities