The New York Life Insurance Company has expressed optimism about the opening up of China's vast insurance market, despite the divergencies between this country and the United States on the industry.
"Nothing is more important than the accession of China to the WTO," said the firm's President and CEO Sy Sternberg.
Washington has insisted that the American International Group be allowed to set up solely foreign-funded life insurance companies in the country, while China maintains that only joint ventures are acceptable.
"There will be another negotiation in the first weekend of September and I hope all obstacles will be cleared at that point for China's accession to the WTO," Sternberg said.
New York Life has communicated with US trade representatives its position that China's accession is the most important thing, he added.
China has promised to gradually open up all of the insurance market to foreign companies within five years of WTO entry.
"We are hoping we will be notified officially that we have a licence to do business in China," Sternberg said.
New York Life is geared to establish branches in any Chinese city where the central government allows it to operate, he said.
"We have entered into preliminary negotiations with potential local joint-venture partners, but we cannot conclude the talks until we get a licence," he said.
A management team has been made ready to leave for China as soon as approval is forthcoming, and the team will recruit local people to kick off the business, he said.
Sternberg, on his fourth visit to China, said the country is very important to New York Life and he feels it is important to maintain strong communication with the highest level of the government. President Jiang Zemin met Sternberg last Thursday.
"The Chinese are large consumers, especially of life insurance, as they have a culture of saving a very large portion of their income and loving their family members," Sternberg said.
"We see tremendous opportunities for the growth of the Chinese insurance market over the next 20 years and room for many companies, both local and international joint-venture, to succeed," he said.
He said New York Life has a 25 per cent market share of life insurance sold to the Chinese American community, and that it has achieved sales success in China's Hong Kong Special Administrative Region and Taiwan Province.
Sternberg said Beijing would be the company's favoured site for starting its Chinese mainland business if he could choose.
The lack of foreign insurance companies in Beijing and its vigorous economic growth make the Chinese capital attractive to foreign insurers, he said.
"Mayor Liu Qi spoke to me about Beijing's growth plan," he said. "With the plan, earnings of the city's population will increase and they will need to buy insurance."
Sternberg said he has been impressed by the rapid changes in China's insurance industry, adding that he believes domestic firms are on the way to becoming more competitive in the market.
(China Daily 09/03/2001)
