NU Online News Service, Mar. 20, 1:29 p.m. – The Principal Financial Group Inc., Des Moines, Iowa, has signed an agreement to start a formal dialogue with the national council that runs China’s pension system.
Principal executives will be working with Chinese officials to study the Chinese system more closely, and council officials will be visiting Principal’s offices in Des Moines and Sydney to see how a private company manages pension assets, according Rex Auyeung, a vice president in charge of Principal’s affairs in Asia.
Although Principal already has offices in China, Auyeung emphasized the value of opening a formal conversation with Chinese pension officials.
“It’s a two-way street,” Auyeung says. “We will continue to learn a lot.”
Any changes that China makes to its pension system are, obviously, up to China, Auyeung says.
But, if China does open the market to administrators from other countries, Principal would like to be one of the first outside companies to enter the market, Auyeung says.
Even if China’s per-capita gross domestic product is low by U.S. standards, the growth rate is high, the savings rate is increasing and the country’s economy is simply too big for financial services companies to ignore, Auyeung says.
Auyeung expects Chinese demand for new types of pension products to be “very high” in 10 to 20 years.