China'S Real Negative Interest Rate Has Continued For 18 Months &Nbsp; The Social Security Fund Has Shrunk.

Since February 2010, China's reality

In August 10th, the Ministry of human resources and social security (hereinafter referred to as the Ministry of human resources) released data. At the end of 2010, there were five basic social insurance systems for urban employees: basic old-age insurance, urban basic medical insurance, work-related injury, unemployment and childbearing.

The five social security fund assets are mainly the form of bank deposits and bonds. Among them, the fiscal accounts of governments at all levels are 20319 billion yuan, the expenditure accounts for social insurance agencies at all levels and other bank deposits are 141 billion 600 million yuan, the short-term payment is 75 billion 100 million yuan, the bond investment is 36 billion 900 million yuan, the entrusted operation is 36 billion 600 million yuan, and the agreement deposit is 66 billion 500 million yuan.

Account deposits, other bank deposits, temporary payments and agreed deposits are all "deposits", accounting for 96.92%, bond investment accounts for 1.54%, and authorized operating funds account for only 1.53%.

The Ministry of human resources has not announced the yield of five funds in 2010.

Caixin "new century", according to the "five national fund accounts receipts and final accounts table" published by the Ministry of finance, takes the proportion of the "interest income" of the five fund accounts for the "year-end rollover balance" (the deduction of interest income in the current year) as the standard, calculates that the yields of five funds in 2004 -2008 were 1.47%, 1.41%, 1.35%, 1.59 and 1.93% respectively.

The most profitable one was entrusted operation, which began in 2007. In order to support the nine provinces to fulfill the pilot of individual accounts for basic old-age insurance for enterprise employees, the central government subsidized some funds, and the National Social Security Fund Board signed the investment agreement with nine provinces. The central finance subsidy fund was entrusted by its investment and operation, and promised a 3.5% guaranteed yield per year.

By the end of 2009, the average annual yield of individual accounts in nine provinces had reached 18.9%.

But according to the National Council for social security fund

People's Insurance official told Caixin new century reporter that due to the real negative interest rate, the insurance fund had shrunk. We can't just look at the short-term impact. In many years, the real interest rate is positive, and the income of the insurance fund depends on the long-term total revenue.

However, from 2004 to 2010, CPI was 3.9%, 1.8%, 1.5%, 4.8%, 5.9%, -0.7% and 3.3% respectively, while the one-year deposit interest rates were 1.98%-2.25%, 2.25, 2.25%-2.52%, 2.52%-4.14%, 4.14%-2.25%, 2.25% and 2.25%-2.75% respectively.

The real interest rates in 2004, 2007, 2008 and 2010 were negative in seven years, and the real negative interest rate was higher in the four years.

"First, we must ensure safety in the investment of social security funds."

The official of the social security department of the Ministry of Finance said that the social security investment income can not only look at the negative interest rate, but now the capital market is not very sound, and the investment risk is very large.

In particular, we should consider the level of government investment in social security funds. "If we allow the county or city to invest, it may have long been over."

The officials said that investment in social security funds may require higher levels of government and better professional institutions to manage.

However, the social security fund has not yet been implemented nationwide.

Although the whole country has reached the provincial level as a whole, it is actually a two level adjustment, not a provincial co-ordination in a sense, or some county level co-ordination.

"In this case, never give money to them to invest."

Treasury officials stressed that it was about control.

The social insurance law, which was implemented in July 1st this year, also explicitly requires that social insurance funds be deposited in financial accounts.

Ministry of finance officials said that at present, to make personal accounts, the central government subsidized funds entrusted the social security fund to invest and operate, "this is the only special case."