10 Responses to “The Other Chinese SWF”


  1. 1 rien huizer December 18, 2009 at 9:34 am

    NSSF is not an SWF, it is a true pension fund. An SWF is something which is (a) not a pension fund and (b) not a central bank or specialist manager of liquid state FX reserves.
    It shows again that Chinese institutions can adopt any purpose that the state wants (in this case possibly capital exports to hide growing FX surpluses (although the trade account does not point to great urgency and the US is hardly vociferous about the USD/CNY rate) or that come up in struggles between political groups.

    • 2 Ashby Monk December 18, 2009 at 2:26 pm

      Not so fast, Rien. How is the NSSF different from Ireland’s NPRF, Chile’s PRF, or New Zealand’s Superannuation Fund? All were a part of the International Working Group of SWFs.

      The question about China’s NSSF is as follows: does it have explicit liabilities to pensioners (who own quantifiable property rights). If not, I’d call it a SWF…

  2. 3 rien huizer December 19, 2009 at 5:11 am

    Thanks Asby,

    Not surprised by your response. Still, NSSF relies heavily on premium contributions, and distributes benefits to urban residents to replace benefits once provided by SOEs. I think it comes closer to a western state pension fund than the NZ and Irish funds (which are primarily for the gvt to “save” for when the retirement surge of the baby boomers starts to stress the pay as you go systems and do not collect premiums). It has a very difficult investment environment though and clearly, it does not collect enough revenue and does not earn enough from its investments to meet future challenges. The domestic market is characterized by an abundance of liquidity and a very volatile stock market. In addition, just imagine the difficulties of an investment manager with a domestic mandate operating for a state fund in China, where most stocks are controlled by the state itself. Like CIC, it is in the first place an instrument of the state (and receives gifts). And like CIC it is multifactional (reps from MoF, PBC, etc). All in all, I am for a much more restrictive definition…

    Happy holidays!

  3. 5 MMcC December 21, 2009 at 1:33 am

    Just a clarification: NCSSF has never paid any money out. It has zero current liabilities and, even when the Jilin and Heilongjian regional plans needed cash, fiscal policy was used to remedy the cashflow problem rather than tapping NCSSF’s accounts. Do what you will in using that data to fit NCSSF into a taxonomy of SWFs…

  4. 6 Ashby Monk December 21, 2009 at 2:04 pm

    Never paid any money out? Perhaps this is a Canada Pension Plan Investment Board (CPPIB) type situation.


  1. 1 FT.com | Money Supply | Economic news headlines Trackback on December 18, 2009 at 1:58 pm
  2. 2 An Update On China’s SWFs « Oxford SWF Project Trackback on February 22, 2010 at 2:48 pm
  3. 3 China’s SWFs Tournament: To the Victor Goes the Reserves « Oxford SWF Project Trackback on September 17, 2010 at 12:52 pm
  4. 4 An Update On China’s SWFs « Oxford SWF Project Trackback on October 14, 2010 at 10:44 am

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This website is a project of Professor Gordon L. Clark and Dr. Ashby Monk of the School of Geography and the Environment at the University of Oxford. Their research on sovereign wealth funds is funded by the Leverhulme Trust and The Rotman International Centre for Pension Management.

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