Liu Zhongli, president of the National Council for the Social Security Fund, announced the figure in Beijing on Monday on the first day of a three-day conference organized by his organization.

He said the fund has reached 60.7 billion yuan (US$7.3 billion). A profit of 928 million yuan (US$111.8 million) was made, mostly as a result of investments in bank deposit accounts and national bonds.

Premier Zhu Rongji has urged the council to develop fresh measures to handle the money well.

Liu said: "In the coming period, we will try our best to ensure that value is maintained and that the increasingly large reserve fund continues to grow."

Liu's organization was established by the State Council in September 2000 to operate the social security fund and to ensure that the State's reserve-fund allocation is maintained in financially difficult times or when some local governments do not have enough money to pay pensions and unemployment and other benefits due to those living in their area.

According to Liu, his council is responsible for managing the fund and seeking proficient investment organizations to operate the money in it. The Ministry of Labor and Social Security and the Ministry of Finance are authorized to decide when and how to use the fund.

"We have mapped out a cast-iron regulation for managing the fund," Liu said.

The central government recently let the council invest the fund on the stock market, in addition to low-risk investments in bank deposit accounts and national bonds. "But the ratio will not exceed 40 percent of the total fund," said Liu.

Liu's council can directly invest in bank deposits and buy national bonds. But the council can invest in stocks, enterprise bonds and securities funds only via professional social security operators.

According to the regulation governing the council, the council has three branch committees for investment decisions, risk management and expert assessments to minimize investment risks and maximize profits.

(China Daily December 19, 2001)