Canada pension fund to expand presence

Canada's pension fund could increase its investment in China to C$150 billion ($116 billion) by 2030, underscoring the fund's confidence in the long-term development of the country, said Mark Machin, chief executive of Canada Pension Plan Investment Board.

"We have a significant stake in China's continued success," Machin told China Daily at the annual China Development Forum, which ended in Beijing on Monday. "We believe over the long-term, China is well positioned to continue to be one of the leading economies in the world."

CPPIB, which managed assets worth C$337.1 billion as of December 2017, has nearly 24 percent of these invested in the Asia-Pacific region and it currently has C$19.8 billion invested in China, according to Machin.

CPPIB has a total quota of $1.2 billion under China's Qualified Foreign Institutional Investor program, which enables it to invest in Chinese stocks, bonds and approved derivatives. The Canadian pension fund also invested in real estate, logistics, banking, and e-commerce sectors in China. Other significant investments include its $1.6 billion exposure to Hillhouse Capital, a China-based alternative asset manager.

Meanwhile, Machin said that CPPIB has agreed to assist Chinese policymakers in addressing the challenges of China's aging population.

"China today faces many of the challenges that the Canadian retirement system experienced in its recent history, and that we continue to work to address," Machin said.

According to China's government institution revamp plan, the National Council for Social Security Fund will be administered by the Ministry of Finance to ensure the fund's security and to better preserve and grow the value of the country's social security fund.

Canada's experience might be useful for China as the country further enhances its pension system in areas including adequacy of coverage, sustainability of the pension system, the adequacy of income in retirement, and ensuring a cost-efficient way to manage the pension system and its assets, according to Machin.

"When Canada went through pension reform back in the 1990s, Canada's federal and provincial finance ministers made some difficult decisions and introduced a set of reforms to the Canada Pension Plan, including the creation of CPPIB, which effectively ended the funding crisis, setting Canada's pension system on a path to long-term sustainability," he said.