China’s national pension fund plans to increase overseas investments in stocks and bonds, including securities in Taiwan, to boost returns as global markets recover from the financial crisis.
The fund also aims to buy stakes in private companies abroad, including Taiwanese firms, Dai Xianglong, chairman of the National Council for Social Security Fund, said in Taipei on Thursday. He didn’t name targets.
“When Taiwan regulations allow, and if there are targets meeting our conditions, we will start investment,” he said of potential purchases in private Taiwanese companies. “We will gradually expand our investment” in overseas markets.
Cross-strait ties reached their warmest in 60 years after Taiwanese President Ma Ying-jeou took office in May 2008 and abandoned his predecessor’s pro-independence stance, and the two sides have since eased restrictions on investments in each other’s banks, brokerages and insurance markets.
The Chinese pension fund’s assets expanded by 38% last year to 776.5 billion yuan ($113.7 billion), as a rally in the nation’s stock market boosted returns and the government contributed more funding.
The pension fund might also form fund management ventures with Taiwanese partners, Mr. Dai said, without providing details. Mr. Ma’s administration has said a trade pact or so-called Economic Cooperation Framework Agreement might be signed by the end of this month.
The Chinese pension fund’s overseas portfolio accounted for about 7% of its total investments as of the end of 2009; it has a 20% maximum allowed in overseas investment, Mr. Dai said.
The fund’s realized investment gains surged 83% last year to 42.7 billion yuan, China’s official Xinhua News Agency reported in January, as the benchmark Shanghai Composite index jumped 80%.
Total assets of the fund might grow to 2 trillion yuan in 2015, Mr. Dai said.