The reform of transferring state-owned assets to social security entered the countdown stage in December. According to the established timetable, China will basically complete the transfer of central and local state-owned enterprises by the end of 2020.
Central enterprises have taken the lead in transferring social security. As early as 2019, they completed the transfer of 1.3 trillion yuan from 81 enterprises, and the transfer of local state-owned enterprises will reach its climax in 2020. From the beginning of the year to the end of the year, various provinces have issued transfer plans and demanded that the transfer plan be basically completed by the end of this year.
The latest policy is Beijing. On December 8, the Beijing Municipal Government announced the Implementation Plan for Beijing to Transfer Part of State-owned Capital to Enrich the Social Security Fund (hereinafter referred to as the Plan). The "Proposal" proposes that the transfer ratio should be unified to 10% of the state-owned shares of enterprises included in the transfer scope, so as to ensure that the transfer work will be basically completed by the end of 2020.
2020 is an important time node for the reform of China’s endowment insurance system. This year, we should not only complete the transfer of state-owned assets, but also realize the provincial-level overall planning of endowment insurance funds. These two reforms will lay the foundation for the next national overall planning.
Dong Dengxin, director of the Institute of Financial Securities of Wuhan University of Science and Technology, told CBN that according to the plans of provinces, the shares transferred by local state-owned assets are stored in financial accounts and entrusted to state-owned holding investment companies for value-added and value-added operation, but this kind of local management is in a transitional state of escrow. Once the national pension insurance is coordinated, the social security fund managed by the provincial government and the state-owned shares transferred by state-owned assets will be managed by the National Social Security Fund Council.
At the same time, CBN learned that the Ministry of Finance is taking the lead in drafting operational management measures for the transfer of state-owned capital. The documents issued in some places this year clearly stated that after the introduction of the management measures for the transfer of state-owned capital by the central government, the local financial departments will separately formulate corresponding specific implementation measures.

More than one trillion state-owned running to help the pension.
The above-mentioned "Proposal" proposes that Beijing will enrich the social security fund by transferring some state-owned capital, and establish an operating mechanism that combines the transfer of state-owned capital with the gradual filling of the gap in the basic endowment insurance fund for enterprise employees, so that the people can share the development achievements of state-owned enterprises, realize intergenerational equity and enhance the sustainability of the system.
The impact of aging on the financial situation of China’s old-age insurance fund is increasingly obvious. The arrival of the first generation of "baby boom" retirement peak requires China to strengthen the sustainability of the old-age insurance fund.
In November 2017, China launched a pilot project of state-owned assets transfer, which was fully launched in September 2019. At the central level, qualified enterprises were required to be basically completed by the end of 2019, and difficult enterprises could be completed by the end of 2020; At the local level, the transfer work will be basically completed by the end of 2020.
By the end of 2019, the central level has completed the transfer of 1.3 trillion yuan. The industry predicts that the total scale after the transfer will be 3 trillion to 5 trillion yuan, which means that at least 2 trillion yuan will be completed before the end of 2020.
These 2 trillion funds will provide an important guarantee for China’s old-age insurance system, especially in the case that the old-age insurance fund has been greatly reduced due to the epidemic, and the acceleration of the transfer of state-owned assets to social security has also provided a "reassuring" for the majority of insured people.
The epidemic did not hinder the transfer of state-owned assets to social security. When consulting local documents, CBN found that since the end of March, when the epidemic eased slightly, many provinces began to introduce plans for allocating social security by state-owned assets. For example, Henan, Hunan and other places introduced plans in April, Chongqing in July, Shanghai in September, and after entering November, Shandong, Gansu, Beijing and other places also promptly introduced relevant plans.
State-owned assets are earmarked to make up for the pension gap.
From the content point of view, the schemes in different places are basically the same, and the transfer scope, transfer target and income mode are consistent with the principle of "Notice of the State Council on Printing and Distributing the Implementation Plan for Transferring Part of State-owned Capital to Enrich Social Security Fund" (Guo Fa [2017] No.49), for example, the transfer ratio is 10% of the state-owned equity of the enterprise, and the undertaker does not interfere with the daily production, operation and management of the enterprise.
Beijing’s "Proposal" reiterates that the equity dividends and operating income after the transfer of state-owned assets shall be collected in a timely manner by the Municipal Finance Bureau, taking into account the expenditure needs of the basic old-age insurance fund and the income of state-owned capital, and shall be used exclusively to make up for the gap in the basic old-age insurance fund for enterprise employees, and shall not be included in the budget management of state-owned capital operation. Before the introduction of the management measures for the transfer of state-owned capital, the scope of investment was limited to bank deposits, the purchase of government bonds in the primary market and the capital increase of the transfer target. The entrusted management company is responsible for the specific operation of equity dividends.
Earlier, when the transfer of state-owned assets was fully pushed forward, the relevant person in charge of the Ministry of Finance said in a reporter’s question that after the transfer of state-owned capital to enrich the social security fund, the way for the undertaker to obtain income was "dividend-based, supplemented by operation". That is to say, the income of state-owned capital mainly comes from equity dividends. In the future, the financial departments at the same level of each undertaking entity will consider the expenditure needs of the basic old-age insurance fund and the income of state-owned capital as a whole, and implement the collection in a timely manner to make up for the gap of the basic old-age insurance fund for enterprise employees.
In addition, another principle of state-owned assets transfer is to be a "sleeping shareholder", that is, the undertaker, as a financial investor, enjoys the right to income, the right to dispose of and the right to know the state-owned shares, does not interfere with the daily production and operation management of enterprises, and generally does not send directors to enterprises.
When combing the local documents, CBN also found that the local governments are slightly different in undertaking subjects, and most provinces are authorized by the finance department. For example, the state-owned shares of enterprises transferred by Jilin Province are held by the provincial finance department on behalf of the provincial government, and Jilin Equity Fund Investment Co., Ltd. is the undertaking subject, but there are also some provinces that are different. For example, Heilongjiang Province authorized the provincial SASAC as the undertaking subject of the state-owned shares of enterprises transferred by the province.
Judging from the progress of local transfer, Hebei has announced that 21 provincial state-owned enterprises have transferred some state-owned assets to enrich the social security fund and transferred state-owned capital of 19.326 billion yuan; Guangxi announced the completion of the transfer of 18 state-owned enterprises at the district level.
Measures for the operation and management of state-owned capital will be introduced
Transferring some state-owned capital to enrich the social security fund is an important measure to reform and improve China’s basic old-age insurance system, and it is also a full embodiment of the sharing of the development achievements of state-owned enterprises by the whole people.
A local state-owned enterprise told the First Financial Reporter that the transfer process is much more difficult than expected, and both central enterprises and local state-owned enterprises have different degrees of difficulties. Local state-owned enterprises have greater difficulties, so it takes longer to transfer the reserved funds.
He said that the number of local state-owned enterprises is large and the situation is complicated. In some places, the property rights of state-owned enterprises have not been completely straightened out, and it is impossible to determine the number of transfers. In some places, state-owned enterprises are not well managed or even face bankruptcy, which makes it impossible to transfer them. Some enterprises have changed the scope and scale of transfer due to the implementation of reforms such as reorganization and restructuring. Others involve listed companies, especially overseas listed companies, and the transfer process is more complicated.
The above-mentioned state-owned enterprises also said that at present, the undertakers in different provinces are not the same, some are social security fund councils, while others are state-owned capital operation companies, and the process of transfer is not smooth due to the unsatisfactory system. Moreover, the management and operation ability of the undertaker is also uneven, which affects the income of state-owned capital.
Peng Huagang, spokesman of the State-owned Assets Supervision and Administration Commission of the State Council, said that the main task in the next step is to deepen the reform of state-owned enterprises, urge enterprises to better improve efficiency and create benefits, and make these shares transferred to the social security fund obtain tangible benefits.
Li Jin, chief researcher of China Enterprise Research Institute, told the First Financial Reporter that the biggest challenge will be how to preserve and increase the value, how to pay dividends and how to collect the proceeds. Generally speaking, the allocation of state-owned assets to social security funds is positive from a big perspective, and the problems brought about by it need to be designed at the institutional level.
How to make "huge deposits" play its due role, industry analysis, on the one hand, state-owned enterprises should better improve efficiency, create benefits and create value by accelerating reforms, so that these shares transferred to social security funds can obtain tangible benefits. On the other hand, the equity dividends of the transferred enterprises will be the main source of income for social security funds from the transfer of state-owned assets. The dividend level of listed companies in China is not high, and it is necessary to further increase the dividend ratio of state-owned enterprises in order to play the role of ensuring the transfer of funds.
The first financial reporter learned that in order to standardize the operation and management of transferring some state-owned capital, enrich the social security fund and strengthen the supervision of the operation and management of transferring state-owned capital, the Ministry of Finance is taking the lead in drafting the operation and management measures for transferring state-owned capital.
Before the introduction of the management measures for the transfer of state-owned capital, the cash income generated by the transfer of state-owned capital can be invested by the undertaker, and the scope of investment is limited to bank deposits, the purchase of government bonds in the primary market and the capital increase of the transferred object. At the same time, all levels of finance, human resources and social security, state-owned assets supervision and other relevant departments will strengthen cooperation, earnestly perform their duties, strengthen supervision and management of the undertakers, and ensure that the transferred state-owned capital is earmarked to make up for the gap in the basic endowment insurance fund for enterprise employees.
When managing this part of assets, asset security should be the primary goal. Li Jin said that this part of the state-owned assets transferred to social security should be operated safely to ensure the preservation and appreciation of state-owned assets. These assets need to be handed over to professionals for operation, and they can participate in projects with good benefits and stable income in the supply-side structural reform.