China Opening up Insurance Products

USA NewsFinally, China has approved and gave access to foreigners to its inner financial products and services, such as securities, asset management and different types of insurance. This comes as big news since its entrance to the WTO 11 years ago in the year 2001. Despite that but the American based firms and other foreign companies are very frustrated because they haven’t been able to expand their business in the Chinese market in the fast way they wanted. This came as a direct result of the notorious negotiations between China and the WTO regarding its entry to the WTO, such notorious negotiations didn’t stress or specify the opening of the Chinese market for financial services from the United States based companies or firms of other nationalities. Although, going by any standards, China has been following all of her commitments towards the WTO in regards of insurance related services and banking, but despite all of that, firms from outside the country only represent a minimal presence in the financial market of China.

The second reason is the fact that the arguments that were stated by sources at the federal govt. of the United States of America concerning the amazing benefits that would be gained by China as a result of its opening of its own financial market to foreigners are not the same and not as compelling as they was before the economic depression of 2008. This is why the Chinese negotiators aren’t keen on the opening of the market as they were before 2008.

This doesn’t mean that after the entrance of China in the WTO didn’t have some positive effects on foreign firms and bank. Before the WTO entrance, the central bank of China used to specify the number of states and cities in China in which banks from outside of the country can legally operate. China also restricted these banks to only work and provide services in the local Chinese currency only. Banks from outside China started their operations in China back in 1981, but of course, such permissions didn’t come without a hefty sum of restraints and constraints, as they also were restricted to provide local currency in their services.

After the entrance of China into the World Trade Organization, most if not all of these constraints were canceled; these cancellations included all of the geographic constraints that were applied to the banks that limited them to operate within certain cities and borders. This was back in 2005. Resulting from following the rules and regulations of the WTO, China’s number of foreign banks increased noticeably.

 

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