China''''s Pension Reform and Capital Market Development

I. IntroductionThere is a close relationship between the pension system and the capital market, which ismost evident in developed countries where pension funds, with large amounts of assetsare the key institutional investors in the capital markets.1 In recent years we have witnessedthe reform of pension systems from pay-as-you-go (PAYG) to funded systems in someLatin American and East European countries, where retirees pension benefits come mainlyfrom their individual accounts, not from the…