China and the World Trade Organization
China successfully entered the World Trade Organization (WTO) in December of 2001. One of the last hurdles for China to join the WTO was the Chinese insurance market. Apparently, the Chinese insurance market is very important to the global community. In addition, China has one of the highest growth rates in either the life or property and liability industries in the world. The Chinese growth rate for insurance premiums was 14. 4 percent in 2000. Finally, China, with a population of more than 1. 2 billion is potentially going to be the largest insurance market in the world.
The Chinese insurance industry has been underdeveloped throughout recent history. There were only 31 insurance companies in China at the end of 2000. More importantly, regulation of the insurance industry has not been able to keep pace with the rapid growth of Chinese insurance market and new products in the current market-driven economy. It is an important task for Chinese authorities to develop a well-functioning insurance market, which will not only provide security for Chinese people and their corporations, but will also enhance the development of the Chinese economy.
The empirical evidence has shown that growth rates of economies and the savings ratio of
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After the entry of WTO, more and more foreign insurer will enter China via mergers, acquisitions and alliances, which will make the competence fiercer. Growing consolidation within a maturing industry will encourage focus on cost control and new services and products to gain profit.