At present, foreign holdings in insurance ventures are capped at 50% in China and there are 57 foreign insurance companies from 16 countries in operation in the nation.
There is a small number of exceptions to the current cap, including the AIA Group which has a 100% owned subsidiary.
Wesley Cui, general manager at Willis Towers Watson in China, told local newspaper the South China Morning Post that the deregulation could attract investors to China’s rapidly growing life insurance sector.
“For joint venture life insurers, there is a prevailing headache that derives from the 50/50 stake holding structure, as no party has the decisive say, leading to unnecessary infighting, waste of resources, which hinders the implementation of strategy and operation of a joint venture life insurer,” Cui said.
In addition to raising the limit of foreign ownership, China’s vice finance minister Zhu Guangyao announced a 20% cap on foreign ownership of Chinese banks and financial asset management companies would be dropped.
Trump wants change
Zhu made the announcement in a press briefing a day after US president Donald Trump called for better access to Chinese markets during a trip to Beijing.
Trump said trade between the two nations was unfair and called for greater market access for US companies.
He said both countries would benefit from a more level economic playing field.