China curbs investment by social insurance funds

Shanghai, Sep 15: China said it will restrict the investment of its social insurance funds after a major corruption scandal involving Shanghai's municipal pension funds.

The central government has ordered that investment of social insurance funds around the country must be limited to bank deposits and government bonds, pending the announcement of new investment rules, the official Shanghai Securities News reported on Friday.

The report did not say when the new rules would be issued or what they would contain.

In the past, Chinese social insurance funds have been invested in a wide range of assets, providing ample opportunities for corruption.

Earlier this year the former head of Shanghai's Municipal Labour and Social Security Bureau was detained on suspicion of impropriety involving a 3.2 billion yuan (3 million) loan of city funds to a toll road operator.

Executives at several local companies and at least one other senior city government official have been detained in the ensuing investigation.

Reuters