SHANGHAI, (Reuters) – China’s Securities regulator has asked mutual funds not to create fund products for private pensions. It also requested that they stabilize markets. This comes as benchmarks in China have fallen to their lowest level in two years.

The Chinese government launched its first pension system last week. This initiative aims to address economic issues related to an aging population as well as to increase long-term investment in the stock market.

China’s major benchmarks plunged by more than 20% last year. This is despite China being the world’s 2nd largest economy and having to deal with COVID-19 flareups, Ukraine’s crisis, and likely tighter U.S. monetary policy.

In a late Tuesday statement, the China Securities Regulatory Commission (CSRC), stated that it will guide fund managers in adhering to the concepts of long-term investment and value investment and playing the role of “stabilizer” and “ballast stones” in capital market markets.

In its statement, the CSRC stated that it supports the nation’s investment industry opening and urged mutual funds participate in policymaking for pension fund investments.

The CSRC announced that it would support long-term foreign institutional investors to establish fund management companies in China or increase shareholdings in China. It will also support qualified domestic fund managers companies to “go international” in order promote the openness of the sector.

This would allow fund houses to establish subsidiaries that specialize in equity, REITs, pension financial services and real estate investment trusts. It also promotes high-quality financial institutions such as commercial banks and insurance companies, which can be used to create fund firms.