Some listed Chinese companies will have to transfer part of their State-owned shares to the National Social Security Fund (NSSF) as the country prepares for an aging society, the government said on June 19,2009.
The measure applies to 131 state-controlled companies that have listed on domestic stock exchanges. Their current market capitalization is 63.93 billion yuan ($9.35 billion), according to the Ministry of Finance. No list of companies was released, however, nor was any date provided for the transfer.
The policy also applies to companies that will list in the future.
Shares transferred to the NSSF must amount to 10 percent of the total in the initial public offerings, under a State Council (cabinet) decision.
If the amount of State-owned shares is not sufficient to meet the 10-percent requirement, the company must transfer all State-owned shares that it holds, according to the Ministry of Finance (MOF) and China Securities Regulatory Commission.
The move was part of an effort to finance the social security system and the retirement of the aging population, the government said.
"The new rule is of great significance to our society and will help bolster our social security system," said Zhao Xijun, a finance professor at China Renmin University.
"The combination of runaway investment but weak consumption reflects our inadequate social security system. It is good news for the fund, which desperately needs capital and support," he said.
