Global EditionASIA 中文雙語Fran?ais
    Business
    Home / Business / Finance

    Pension business to see explosive growth

    By JIANG XUEQING | China Daily | Updated: 2019-05-24 07:49
    Share
    Share - WeChat
    [Photo/IC]

    Tax incentives, government policies set to drive expansion over 20 years

    Personal commercial pension schemes, which include tax-deferred pension insurance and pension securities investment funds, will see explosive growth in China over the next 10 to 20 years, fueled by the driving force of tax incentives and government policies, a newly issued white paper by McKinsey & Company said.

    China launched a pilot program last year providing individual income tax deferral on commercial pension contributions, investment gains and retirement distributions. The one year trial program took effect on May 1, 2018, and covered Shanghai, Fujian province and the Suzhou Industrial Park.

    "We saw strong demand for the 'third pillar' of China's pension system, which is based on commercial pension products including tax-deferred commercial pension insurance. The demand for such products will keep rising, with the support of preferential tax policies," said Sun Zheng, senior engagement manager at McKinsey, a global management consulting firm.

    He added that the current problems of the pilot tax-deferred commercial pension insurance scheme in China are all technical and can be solved within two years.

    "We look forward to regulatory authorities in creating a top-down design and a platform for personal commercial pension fund accounts and launch tax incentives as soon as possible," he said.

    Although the procedure for filing individual income tax deferral after purchasing tax-deferred commercial pension insurance is very complicated and the upper limit for this kind of tax deductions is quite low, McKinsey experts remain positive about prospects for tax-deferred commercial pension insurance over the medium and long term.

    At the end of 2018, tax-incentivized personal commercial pension schemes only contributed to a tiny share of China's pension fund market, while the basic pension insurance scheme, with its balance of assets reaching about 4.4 trillion yuan ($636 billion), accounted for more than 70 percent of the market.

    Enterprise annuities and occupational pension schemes, of which the asset balance was 1.6 trillion yuan, accounted for nearly 30 percent of the market, according to the white paper.

    "Introducing foreign capital will be a perfect complement to the Chinese pension system, as leading foreign insurance companies and asset managers have accumulated rich experience in product design, customer service and investment management. They will promote the development and innovation of the industry, in addition to offering customers more choice," said Sun.

    Foreign financial institutions are keenly interested in China's pension fund market, according to Chen Hongming, associate partner at McKinsey.

    "As the pension fund market has just begun to grow in China, foreign financial institutions believe that they will start at the same point as their Chinese counterparts once the regulators give them access to this area of business, not to mention that they have many years of experience in providing various types of pension fund products," said Chen.

    In traditional areas of insurance business that are highly regulated, however, foreign insurance companies face intense competition from their large and powerful Chinese counterparts, making it difficult for foreign insurers to increase their market share here, he added.

    In first-tier cities and affluent regions such as Beijing, Shanghai and the Guangdong-Hong Kong-Macao Greater Bay Area, the consumption concept and the amount of disposable income of potential Chinese clients are quite similar to those of the customers in developed countries.

    For foreign financial institutions, their brands and concept of service are widely accepted in these economically developed areas, giving them an edge over their Chinese counterparts. This has also contributed to their booming interest in the country's pension fund market, he said.

    During an interview with China Daily last year, Daisy Ho, managing director for Asia excluding Japan at Fidelity International, said the global investment management company hopes to participate in China's pension reform, depending on the progress of the relaxation of regulatory restrictions on investment by foreign asset managers in this sector.

    "As a global leader in pensions, we would like to share with the China market the experiences we have gained from running sophisticated pension businesses in Asia and Europe. To let every elderly person live healthily and happily is always part of the Chinese Dream," she said.

    Top
    BACK TO THE TOP
    English
    Copyright 1995 - . All rights reserved. The content (including but not limited to text, photo, multimedia information, etc) published in this site belongs to China Daily Information Co (CDIC). Without written authorization from CDIC, such content shall not be republished or used in any form. Note: Browsers with 1024*768 or higher resolution are suggested for this site.
    License for publishing multimedia online 0108263

    Registration Number: 130349
    FOLLOW US
    CLOSE
     
    午夜精品久久久久久久无码| 无码人妻精品中文字幕免费 | 日韩久久久久中文字幕人妻| 日韩av无码一区二区三区| 日本中文字幕在线视频一区| 影院无码人妻精品一区二区| 欧洲成人午夜精品无码区久久| 亚洲欧美日韩中文字幕一区二区三区| 久久中文字幕精品| 无码人妻丰满熟妇区免费| 亚洲精品欧美二区三区中文字幕| 亚洲.欧美.中文字幕在线观看| AA区一区二区三无码精片| 亚洲av成人无码久久精品| 无码av高潮喷水无码专区线| 欧美 亚洲 有码中文字幕| 日韩经典精品无码一区| 777久久精品一区二区三区无码| 无码午夜人妻一区二区三区不卡视频 | 中文字幕乱码人妻一区二区三区| 97人妻无码一区二区精品免费| 亚洲午夜福利AV一区二区无码| 最好看的最新高清中文视频| 中文字幕在线观看亚洲日韩| 91视频中文字幕| 国产区精品一区二区不卡中文| 亚洲乱码中文字幕综合| 天堂在线最新版资源www中文| 午夜无码视频一区二区三区| 国产精品成人无码久久久久久| 国产成人AV片无码免费| 久久精品aⅴ无码中文字字幕不卡 久久精品aⅴ无码中文字字幕重口 | 国产在线无码视频一区二区三区| 亚洲成AV人片天堂网无码| 国产AV无码专区亚洲AWWW| AV无码久久久久不卡蜜桃| 中文字幕久久精品无码| 亚洲精品高清无码视频| 亚洲AV永久无码区成人网站| 人妻丝袜中文无码av影音先锋专区| 四虎成人精品无码|