Zhou Xiaochuan highlights pension funds' potential to support tech innovation

Pension funds have the potential to play a greater role as long-term capital supporting technological innovation, while reasonable capital market investment returns are important to the functioning of the pension system, former central bank governor Zhou Xiaochuan said on Saturday.

Speaking at the 2026 China Capital Market Annual Conference in Shanghai, Zhou noted that technology companies' long-term earnings potential aligns with pension funds' long-term investment horizons. He also highlighted the importance of diversification across the technology sector to avoid excessive concentration.

Zhou previously served as the vice-chairman of the 12th National Committee of the Chinese People's Political Consultative Conference, governor of the People's Bank of China, and chairman of the China Securities Regulatory Commission.

He discussed the scope for increasing accumulated pension assets and expanding the role of the pension system's second and third pillars. Greater pension asset accumulation, rather than a predominant reliance on pay-as-you-go financing, could help provide patient capital to support technology-led economic development, he said.

Zhou also identified reasonable returns, including returns for pension funds, as an important capital market objective, alongside efficient resource allocation and risk management.

He added that overly high‑frequency trading can decouple from market fundamentals, amplifying positive‑feedback loops and market volatility. Drawing on control‑theory thinking, regulators could install a "low‑pass filter" for the market by adjusting profit margins, information disclosure pacing and order‑matching mechanisms to curb abnormal market swings, Zhou said.