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China’s NSSF names new chairman

Ex-finance minister Jiwei Lou was named the fifth chairman of the country's largest pension amid a push into alternatives.

Jiwei Lou, China’s former minister of finance of China and veteran reformer, has been appointed chairman of the National Social Security Fund, China’s largest pension fund.

Lou will replace Xuren Xie who had been heading the pension fund since 2013, the NSSF said in an announcement on 24 November. Earlier this month, Lou left his post as finance minister and Jie Xiao, a former tax bureau chief who has previously suggested that the Chinese government has room to raise personal taxes, was promoted to the position. Prior to joining NSSF, Lou was previously chairman and chief executive of China’s largest sovereign wealth fund China Investment Corporation and formerly served as vice governor of Guizhou.

Lou was known as an ardent reformer during his post at the Ministry of Finance. Since joining in 2013, Lou made changes to the budget management system, replaced China’s business tax with value-added tax, advocated for public-private partnerships in infrastructure projects and implemented policies to swap local government debt with bonds.

Lou’s appointment also comes a year after China’s State Council allowed the NSSF to increase investments in riskier assets such as private equity and infrastructure as it seeks to generate greater returns and boost the size of the fund to cover growing retirement payouts.

According to the National Council for Social Security Fund which administers the NSSF, the pension fund generated a 15.1 percent investment return in 2015, higher than the 11.7 percent posted in 2014 – its best performance in six years mainly driven by its allocation to alternatives. As of April 2016 nearly a quarter of the 1.8 trillion yuan ($260 billion; €245 billion) fund is allocated to alternatives according to Infrastructure Investor data.