China’s RMB 516 billion ($76 billion; €59 billion) National Social Security Fund will invest between RMB 20 billion and RMB 30 billion in state-owned China Development Bank, China Knowledge noted a report in a local daily as saying.
Mainland China’s largest pension fund will make the investment in China Development Bank following the establishment of the bank's holding company, which is likely to be as early as next week, an unnamed source told the daily.
China Development Bank is one of three policy banks in the country, and it is mainly responsible for raising capital for the funding of large infrastructure projects in China.
Last December, Central Huijin, which is an investment arm of China Investment Corporation, invested $20 billion in the lender. Central Huijin and the Chinese Ministry of finance are the largest shareholders in China Development Bank, the report noted. It also cited an official as having said that China National Offshore Oil Corp and China National Petroleum Corporation could also be potential investors in the bank at a later stage.
The National Social Security Fund has stepped up its investment activity in recent times. In May this year, Chinese authorities allowed the pension fund to invest up to 10 percent of its assets in domestic private equity funds not backed by the government. Since then, the pension fund has committed RMB 1 billion each to funds established by CDH Investments and Hony Capital.
The pension fund is also reportedly launching an RMB-denominated private equity fund in partnership with CITIC Capital, a China-focused alternative investment firm.