Today’s Focus: Mainland China’s “pension loans” cooling off shortly after gaining traction? Social three major crises exposed; Former “supermarket king” emptied out 2 billion? Insider reveals shocking details; Italy signs 20-year energy mega deal! Will the US lower tariffs on the EU?
Recently, about 40 small and medium banks in Hunan Province issued “pension loans,” attracting public attention. However, on July 10, the Hunan Province Rural Credit Union notified banks under its jurisdiction to suspend “pension loan” business and remove all promotional materials.
“pension loans” were designed to address the issue of some residents approaching retirement age who do not have enough money to pay for pensions. Banks provide loans to these residents to allow them to catch up on social security payments so that they can smoothly receive their pensions upon reaching retirement age.
According to information, borrowers must be under 65 years old and not receiving pension benefits. As long as they meet the criteria, they can apply for loans with a maximum amount of 90,000 yuan (RMB), repayable over a period of up to 15 years at interest rates between 3.1% and 3.45%. After retiring, borrowers repay the loan principal and interest in installments using their monthly pension. Additionally, the bank purchases commercial insurance for the borrower, which will cover any remaining loan amount in the event of the borrower’s death.
Banks calculate that if a borrower loans 90,000 yuan, they would need to repay 625.86 yuan per month. According to current policies, upon retirement at age 60, a monthly pension of 808.48 yuan can be received, leaving a surplus of 182.62 yuan after deducting the repayment.
At first glance, “pension loans” seem to achieve a win-win situation for all parties involved: insured individuals do not need to pay out of pocket, banks have business to conduct, and the social security bureau increases the number and amount of fee-paying individuals.
So, why did the government cancel “pension loans”?
Commentator Wang He believes this is because the compliance of “pension loans” in practical operations is ambiguous. According to current loan management regulations, loans can only be used for consumption or production operations. The current issue is whether catching up on social security payments counts as consumption. This question currently remains unanswered.
Moreover, “pension loans” come with certain risks. For example, the interest rates are higher than mortgage rates and fixed. If the country lowers interest rates in the future, borrowers will have to bear higher financial costs. Additionally, due to the unclear relevant systems, all risks are borne by borrowers, for instance, if a borrower experiences an accident, their children may face additional financial burdens.
So why do banks continue to promote “pension loans”? This is related to the difficulties faced by small and medium banks.
According to official data, China currently has over four thousand bank institutions, with agricultural commercial banks and rural banks accounting for a large proportion. These small and medium banks, especially rural banks, have faced closures and reorganization in recent years, with over 200 small and medium banks being dissolved just in 2024. The problem these banks face is not the inability to lend, but the inability to find suitable borrowers. “pension loans” are an attempt by these small and medium banks in their difficulties.
However, while trying is easy, succeeding is difficult. “Pension loans” lack top-level design, such as whether the system allows for such loans, how risks are shared, and whether the government provides safeguards. Currently, there are no answers to these questions. Without systemic support, financial innovation by small and medium banks is equivalent to “going it alone” and is unlikely to be sustainable in the long run.
Having discussed the banks, let’s now look at the retirement issues of farmers.
The problem of aging in China’s rural areas is becoming increasingly severe. Statistics show that in 2020, there were 120 million elderly people over 60 years old in rural areas, accounting for 24% of the rural population. It is projected that by 2028, the proportion of the rural elderly population will exceed 30%, which is 11 percentage points higher than in urban areas.
Currently, farmers mainly rely on the basic pension insurance for urban and rural residents, an institution that seems to have wide coverage, but in reality, the pension level is very low.
Official data shows that in 2024, the average pension level for urban and rural residents was 246 yuan per month, while the minimum living allowance in rural areas averaged 594 yuan per month. In other words, the pension received by farmers is only half the national minimum standard. This means that farmers cannot rely on pensions for their retirement.
What’s even worse is that the number of insured individuals in mainland China is continuously decreasing. From 2020 to May 2025, the number of insured individuals decreased by nearly 10 million, while from 2020 to 2024, the number of individuals receiving pensions increased by nearly 20 million. This means that fewer people are contributing, while more people are receiving benefits. At this rate, the depletion of the pension fund is only a matter of time.
These are the reasons why “pension loans” have sparked public debate, whether it is the difficulties faced by small and medium banks, the retirement issues of farmers, or the depletion of the pension fund—none of these problems can be easily solved through loans. Continuing down this path may lead to more issues, which is likely the primary reason for the local government’s alternating actions.
Recently, the “Renrenle” chain supermarkets in Shenzhen, Guangdong, officially delisted from the Shenzhen Stock Exchange. It is reported that this once-called “supermarket king” Renrenle, ended in failure after four consecutive years of losses.
As a representative of China’s private supermarket industry, Renrenle Supermarket, founded in 1996, once enjoyed great success. In 2007, its sales exceeded billions (RMB); in 2010, it went public, raising up to 1.052 billion yuan, claiming to be the “number one private retail stock”; in 2019, it was listed in the top 100 retailers in 2018. At its peak, Renrenle had 82 stores nationwide, with outlets in dozens of large and medium-sized cities across Guangdong, Shaanxi, Sichuan, Tianjin, Chongqing, Guangxi, Fujian, Hunan, among other provinces, with a total operating area exceeding 1.07 million square meters.
However, by the end of 2023, Renrenle’s audited net assets were as low as “-387 million yuan”; in April 2024, its financial report showed net assets declining further to “-404 million yuan,” leading to its delisting.
So the question remains, how did such a strong private enterprise end up in such dire straits?
A source, using the pseudonym Mr. Li, disclosed to Dajiyuan that Renrenle’s management was chaotic and no longer resembled its former glamour.
Li stated that when Renrenle went public in 2010, it relied on the performance of its stores in Xi’an, Shaanxi, as its sales in Shenzhen were already declining at that time. By 2018, the sales performance of Renrenle’s various stores was already very poor. This was because Renrenle operated as a family-business, with chaotic management. Most of the supermarket’s top executives were relatives or classmates of the founder He Jinming, and this extended to procurement executives, most of whom were relatives. What’s more egregious is that since the boss’s wife took control of the company’s operations, she demanded that every store manager engage in phantom sales.
Li explained that phantom sales refer to scenarios where store managers have someone pretend to be a customer and purchase products. For instance, buying 1,000 kilograms of pork, then making the purchase with a credit card, but not delivering the goods. The cashier would then return the money to the buyer from the back. In other words, there was no actual sale; it was just a paper transaction. This phantom sales practice persisted from 2018 to 2022, with fictitious sales reaching over twenty billion.
Li revealed that to drain Renrenle, the owner He Jinming and his wife Song Qi established a company called China and Australia Supplies. This company mainly supplied goods to Renrenle, but at inflated prices. The goods included imported milk, red wine, white wine, etc. For example, the purchase price of red wine was 5 yuan, but the price sold to stores was as high as 50 yuan. Over eight years, they made over twenty billion in internal supply transactions, effectively emptying the company.
Li said that in 2019, the Qujiang District Management Committee in Xi’an, Shaanxi, took over Renrenle, but at that time, Qujiang only held a 21% stake, making it unable to command the management of Renrenle. Thus, Renrenle’s situation continued to deteriorate.
Mainland Chinese media reported that from 2021 to 2023, Renrenle suffered consecutive losses totaling approximately 1.862 billion. In 2024, Renrenle launched a “shell protection” plan to maintain its listed status. On the one hand, Renrenle divested bad assets to stop the bleeding, and on the other hand, it sold assets to related parties to complete the restructuring.
Li revealed, Renrenle’s “shell protection” plan was close to success, but at the last minute, Renrenle was reported by senior management and suppliers, causing the “shell protection” plan to ultimately fail.
On July 10, Renrenle supermarket employees protested outside a Renrenle store in Jiangnan District, Nanning, Guangxi, accusing the supermarket of owed social security payments and abandoning employees.
Li claimed that this matter is very serious, but no one is taking action! Most of these employees are in their forties and fifties, with elderly dependents, unpaid wages, unpaid social security, and no compensation, which is essentially pushing them to a dead end!
Furthermore, Li stated that the most tragic aspect is the situation of Renrenle’s suppliers, as many went bankrupt because they could not retrieve their sales proceeds. He mentioned that Renrenle likely owed tens of millions in wages to employees, and owed suppliers as much as several billion, with over twenty billion in Shenzhen and Xi’an alone.
Lastly, Li concluded that while a few stores in Shenzhen are still operating, they are empty with no goods for sale, and closure is only a matter of time.
Amidst the critical phase of EU-US trade negotiations, Italy’s largest energy company, Eni, signed a 20-year natural gas procurement agreement with a US energy exporter Venture Global.
On July 16, Politico reported that Eni and Venture Global reached an agreement where Eni will import 2 million tons of liquefied natural gas from the US annually over the next 20 years. This is the first long-term contract signed between Eni and a US natural gas producer.
Venture Global’s CEO, Mike Sabel, mentioned that this contract is not only a significant milestone for the company but also indicates the increasing influence of the United States in the global energy market.
During the negotiations between the US and EU, President Trump has consistently urged Europe to “buy more products” from the US. He once publicly stated, “I told the EU they have to buy massive amounts of our oil and natural gas to reduce the huge trade deficit between the US and the EU. Otherwise, the US will have to keep levying tariffs.”
Before reaching the energy agreement, during a meeting with President Trump, the Italian Prime Minister hinted that Italy would increase purchases of US liquefied natural gas to reduce the trade deficit between the two countries.
On Saturday, July 12, President Trump sent a letter to the EU Commission President Von der Leyen, stating that starting from August 1, a 30% tariff would be imposed on EU exports.
To avoid high tariffs, the EU’s Chief Trade Negotiator, Maroš Šefčovič, flew to Washington again on July 16 for talks with the US, aiming to reach an agreement with the US within the final deadline set by Trump.
Translation and Adaptation by [Your Name]