China's Social Security Fund, with only a five-year history, is facing difficulties in expanding its fund scale due to unstable capital sources, the Economic Daily, China's leading economic newspaper, reports on Monday.

On the Fund's fifth founding anniversary, which fell on Sept. 7 this year, Xiang Huaicheng, president of the National Council for Social Security Fund, invited delegates from the ministries of finance, labor and social security, National Audit Office, the China Securities Regulatory Commission, the Chinese Academy of Social Sciences as well as the Asian Development Bank to discuss ways to solve the Fund's difficulty.

The five-year operation of the Social Security Fund is not bad, said Xiang, former Chinese Minister of Finance.

Since the national social security fund was established in 2000, its total volume has been steadily rising, with the accumulative profit rate standing at 11.82 percent in the five years, much higher than the inflation rate of 5.04 percent in the corresponding period, according to the newspaper.

By the end of last July, its general assets had reached 181.8 billion yuan (22.4 billion US dollars), with strict and scientific systems established to ensure the security of the Fund.

The total volume of the Social Security Fund, however, is still not enough in consideration of China's huge population size and fast aging speed.

According to an investigation by the China Population Research Center, the country's population of people with age at or above 60 is increasing at an annual rate of 3.53 percent. By 2030, China's aged population is expected to hit 400 million.

If the Fund exceeds 1 trillion yuan, the normal operation of China's social security system will be ensured. The imminent problem, however, is the unstable capital sources of the Fund, Xiang said.

The sources of China's national social security fund include stock ownership assets, funds from the central budget, lottery incomes and investment returns.

The annual profit of the social security fund is about 4 billion yuan, too little for the Fund to accumulate to a satisfying level, Xiang said.

Without stable capital source, it is difficult for the social security fund to reach 1 trillion yuan, he said, calling for the immediate start of state-owned asset allocation.

Source: Xinhua