Like our Social Security System, the Chinese retirement fund faces funding problems. The Chinese government has come up with what I think is an ingenious way to fix the problem.
The government has ordered 131 state-owned companies to transfer 10% of their shares to the National Social Security Fund. This amounts to a $9.4 billion cash infusion.
Could the same thing happen in the U.S.? Now that the government owns big chunks of companies like General Motors and AIG…it could happen.
More on this topic
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Thinking the Unthinkable: What if China Devalues the Renminbi?
(naked capitalism, 2/18/10)
Are Rising US-China Tensions Pointing to a Rupture?
(naked capitalism, 3/15/10)
Jim Chanos Is Wrong About Investing in China
(Investment U, 3/3/10)
WHAT CHINESE MALLS TELL US ABOUT THE ECONOMIC REALITY
(THE PRAGMATIC CAPITALIST, 2/22/10)
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