China’s Private Pension Scheme Opens New Opportunities for Individuals as Well as Insurance Companies
With China’s society fast aging, the proportion of the elderly population will further expand, the labor force will decrease accordingly, and the financial pressure on welfare system will continue to intensify. Because the public pension and medical security system will also be under pressure, it is expected that individuals will have to endure more financing pressure.
The longevity financing model is one of the foundations and cores of all solutions to problems in current situation, and its importance cannot be overstated. With the continuous improvement of residents’ awareness of self-reliance in recent years, people’s demand for voluntary financial reserves for future pensions has risen. This also indicates that the scale of the personal wealth market will continue to expand, and the era of wealth will be accompanied by the era of longevity. At the same time, insurance companies also need to explore optimal financing model in practice, and also need to innovate in the context of industry transformation trends.
Government Encourages Financial Institutions to Provide Services for the New Citizens
In China’s booming cities, takeaway riders, construction workers, roadside vendors, and newcomers to the workplace all share a common label, the “new citizens”. While supporting the operation and development of the city, they are faced with an embarrassing situation: it is difficult for new citizens to apply for the financial services. According to official statistics, there are current- ly about 300 million “new citizens” living in cities.
Such a situation has been brought to the attention of regulators. In March this year, the China Banking and Insurance Regulatory Commission and the People’s Bank of China issued a document to encourage banks and insurance institutions to strengthen product and service innovation according to local conditions, improve the equality of financial services, and cater to new citizens’ needs like housing, education, medical care.
The Authorities Rolling out New Guidelines to Build Basic Data Systems
Recently, the central committee for deepening overall reform has launched a new data management policy to deal with issues such as data property rights and security governance. Some scholars believe that the policy clarifies the ideas of the data elements market, which means that the institutional foundation of the data elements market has begun to be built.
With the construction of the data systems, the marketization of data elements has ushered in the initial stage. Data elements are different from traditional production elements. If the ownership concept of traditional production elements is used to confirm the ownership of data, it will only lead to a dead end. Data elements have value only in shared circulation. China’s decision-makers tend to downplay the concept of data ownership and adopt a separate property rights operation mechanism.
China’s New Asset Management Regulations Herald Positive Changes as Well as Challenges
The transformation guidance proposed by the regulators, coupled with the stock market volatility, made the newly born bank wealth management companies have experienced a huge challenge. And this is the first year marking the end of the transition period of the new asset management regulations. The new regulations on asset management, which will affect trillions of funds, will be officially implemented in 2022. As of the end of June 2022, the existing scale of wealth management products reached 29.15 trillion yuan, a year-on-year increase of 12.98%.
Insiders of wealth management companies said that in fact, the market has a certain tolerance for net worth wealth management products. At that time, some investors began to redeem products and turned to savings, and wealth management companies did everything possible to stabilize investors’ confidence. A number of industry insiders also said that in 2022, as the first year of full implementation of the new asset management regulations, the real challenges faced by wealth management companies have just begun, and there will be certain risks in the near future.