Recently, the China Banking and Insurance Regulatory Commission approved the establishment of Hong Kong Jiyou Bank Co., Ltd. in Shenzhen Branch and the German Allianz Insurance Group in the establishment of Allianz (China) Insurance Holdings Co., Ltd. Among them, Allianz (China) Insurance Holdings Co., Ltd. will become my country's first foreign-funded insurance holding company.
This is another step forward in this round of financial industry opening up. The outside world believes that foreign capital will participate in China's financial market faster and faster, and relevant laws and regulations will also be introduced in conjunction with the introduction.
From nothing to something, exert the "catfish effect"
This year, the Boao Forum for Asia has sent a new round of opening up. President Xi Jinping announced that China will ensure that the major financial opening measures announced are implemented as soon as possible, and strive to make the results of opening up benefit enterprises and people from all over the world as soon as possible.
After that, the financial management department announced opening-up measures, one is to focus on the restrictions on foreign equity ratios of financial institutions, and the other is to focus on the business scope of foreign financial institutions in China.
In order to cooperate with the advancement of reform and opening up, in August this year, the China Banking and Insurance Regulatory Commission officially issued the "Decision of the China Banking and Insurance Regulatory Commission on the Abolition and Amendment of Some Regulations" (hereinafter referred to as the "Decision"). On October 25, the China Banking and Insurance Regulatory Commission drafted the "Decision of the State Council on Amending the Administration of Foreign Banks of the People's Republic of China (Draft for Comments)" on its behalf and solicited opinions from the public.
In fact, in the 40 years of reform and opening up, foreign banking and insurance institutions in China have actively integrated into China's financial system, especially in recent years, they have performed positively in promoting the construction of the "Belt and Road", internationalizing the RMB, and supporting the construction of the free trade zone.
In 1979, China approved the first foreign bank, Japan Export Bank, to set up a representative office in Beijing, which has since kicked off the opening up of China's banking industry. In 2007, the former China Banking Regulatory Commission issued the "China Banking Industry Opening-up Report", which clearly stated that it would promote the comprehensive development of foreign banks and encourage foreign banks to establish or transform existing branches into legal person banks registered in China. Since then, many foreign banks have come to China to establish legal person banks or participate in the development of China's banking industry by holding shares in Chinese banks.
Previously, at the "Shanghai Foreign-Funded Bank Reform and Opening-up Achievements" held by the Shanghai Banking Association, Wang Ke, deputy president of Overseas Chinese Yongheng Bank (China) and general manager of the Pearl River Delta headquarters, said that with the increase in the international use rate of RMB and the more convenient cross-border financing of enterprises, foreign banks have provided more diversified financial support for Chinese companies that "going out" and foreign companies that "come in".
China's insurance industry opened up to the outside world in 1992. In this year, the State Council selected Shanghai as the first pilot city for insurance opening up to the outside world; in July of the same year, the People's Bank of China promulgated the "Interim Management Measures for Shanghai Foreign-funded Insurance Institutions"; in September of the same year, AIA was approved to establish a wholly-owned life insurance company in Shanghai. With AIA entering China, it is a brand new insurance marketing model of the individual marketing agency system. Looking back now, the personal marketing agency system not only promoted the reform of my country's insurance sales system at that time and was widely adopted by domestic life insurance companies; to this day, it is still the main channel for my country's insurance premium income. In the first three quarters of this year, this channel achieved premium income of 1.5 trillion yuan, accounting for 48.3% of the total premium income of the country.
An insurance regulator admitted: "This innovation in insurance marketing model has promoted the innovation of insurance products in my country. Life insurance companies have gradually shifted their business development focus to individual insurance business, and developed a large number of life insurance products and health insurance products for personal needs, which has brought about a huge change in the structure of life insurance products. It has gradually changed from simple life insurance, group accident insurance, and pension annuity insurance to traditional life insurance that focuses on survival, health and pension risk protection."
At present, a total of overseas insurance institutions in 16 countries and regions have established 57 foreign-funded insurance institutions in my country, entering professional fields such as health, pension, and catastrophe insurance, improving the structure of my country's insurance market entities, and forming a situation where Chinese and foreign-funded insurance companies complement each other's advantages, fair competition and common development. Major insurance groups around the world have set up operating institutions in my country, and the "catfish effect" generated by the global insurance companies have promoted the improvement of competitiveness and vitality.
scrambles to participate in the new round of opening up
As the opening-up policy is gradually implemented, my country's financial industry has once again pressed the "fast forward key" to the outside world.
In terms of banks, the "Decision" cancels the restrictions on foreign shareholding ratios of Chinese banks and financial asset management companies, implements consistent equity investment ratio rules for domestic and foreign capital, and continues to promote the facilitation of foreign investment.
Measures for opening up the insurance industry to the outside world are gradually being implemented: the foreign shareholding ratio of foreign life insurance companies is relaxed to 51%, and there will be no limits after three years; the business scope of foreign insurance brokerage companies is relaxed to be consistent with Chinese companies; and qualified overseas investors are allowed to come to China to operate insurance agency business and insurance appraisal business.
According to the information disclosed by the China Banking and Insurance Regulatory Commission, in terms of banks, it has approved the establishment of a Shanghai branch of Jordan, the establishment of a Shenzhen branch of China Trust Commercial Bank, and the establishment of a Shenzhen branch of Bank of East Asia (China) Co., Ltd., to be upgraded to a branch, and approved the establishment of a subsidiary of Changhua Commercial Bank in mainland China and the establishment of a subsidiary of Cathay Shihua Commercial Bank in mainland China; in terms of insurance, it has agreed to the establishment of ICBC AXA Life Insurance Company and the establishment of a branch of Dahan Reinsurance Company. Overall, this round of opening up has been completed and approved by the China Banking and Insurance Regulatory Commission.
By the end of 2017, the total assets of foreign banks accounted for only 1.32% of China's total banking industry; at the same time, the total asset share and premium income market share of foreign insurance companies were 6.71% and 5.85% respectively, which also remained at a low level. This shows that my country still has some factors that restrict the development of foreign banks in China, and it is necessary to further expand the pace of opening up of the financial market and make up for the shortcomings in opening up.
Review the opening process of the banking industry, foreign capital investment in Chinese banks has played an important role in the market-oriented reform of my country's banking industry. It not only strengthens the capital strength of Chinese banks through "attracting investment", but also improves the operating management and risk control level of Chinese banks through "attracting wisdom", and boosts the international market's confidence in the overall banking industry in my country.
It is reported that the China Banking and Insurance Regulatory Commission will implement the instructions of the CPC Central Committee and the State Council on further expanding opening up to the outside world. On the basis of compliance with the law and strictly adhering to the bottom line of risk, on the one hand, it will continue to promote the implementation of various opening measures for the banking and insurance industry, and at the same time accept and approve a number of market access applications; on the other hand, the financial management department will also issue corresponding laws and policies.
The above-mentioned regulator said: "We have discovered a trend that the global banking industry has encountered challenges, so everyone is exploring new ways of cooperation or business areas, such as asset management business is an area that international banks now value very much. But overall, foreign capital is optimistic about China's development, which is certain."
In addition, in May this year, the "Global Insurance Market Research Report" released by the research department of Allianz Group in Germany predicts that by the end of the 1920s, about 40% of global premium income will come from the Chinese market, and China will replace the United States as the largest insurance market.
Opening process continues to advance
At the first China International Import Expo, General Secretary Xi Jinping once again emphasized "continuously relaxing market access." It can be foreseeable that China's financial industry will be more competitive in opening up.
At the beginning of this month, American Express "breaks the ice" of China's bank card clearing market, and its joint venture Connect company in China was approved for preparation. The outside world believes that the opening up of financial institutions to financial infrastructure construction is of important milestone.
Regarding the results of this round of opening up, Wang Zhaoxing, Vice Chairman of the China Banking and Insurance Regulatory Commission, concluded that new breakthroughs have been made in the opening up of the banking and insurance industry, including the cancellation and relaxation of the proportion of foreign-funded shareholding, relaxation of the access conditions for foreign-funded institutions and business, expanding the business scope of foreign-funded institutions, and optimizing the regulatory rules of foreign-funded institutions, are currently implemented one after another. The continuous expansion of opening up to the outside world will promote the increase in effective financial supply and enhance the vitality of the financial market.
"Relying on a series of policies recently issued by the Chinese government to expand opening up to the outside world and encourage foreign financial institutions to expand investment in China, the approval of Allianz (China) Insurance Holdings Co., Ltd. is an active measure for China's financial and insurance industry to further open up to the outside world, another witness to the long-term friendly bilateral relations between China and Germany, and will further promote the development of the cooperation relationship between the two countries." According to Oliver Bet, Chairman and CEO of Allianz Group, in the future, Allianz (China) Insurance Holdings Co., Ltd. will provide Allianz (China) Insurance Holdings Co., Ltd. with Chinese and foreign consumers to provide Allianz with all-round financial and risk management solutions and services, and share with consumers the continued opening and development of China's financial market.
It is not difficult to see from Allianz's statement that further expanding opening up can not only improve the professional level of my country's insurance industry, but also enrich my country's insurance product supply, expand market supply capacity, and meet consumers' diversified needs.
"All-round opening means fairer competition, a more open market, higher efficiency, and richer products and services." At the same time, Wang Guojun, professor at the School of Insurance of the University of International Business and Economics, also told the Financial Times reporter that all-round opening also means that the competition in my country's insurance market will be more intense.
"Looking forward, the speed of China's financial industry expansion will be further accelerated. The negative list is expected to be further improved in terms of specific access conditions, and the negative list will continue to be relaxed by minimizing the negative list as much as possible." He Fei, senior researcher at the Financial Research Center of the Bank of Communications, said that in the next step, it is more worth looking forward to continuing to liberalize the scope of business development for foreign financial institutions. Only by working hard to expand the scope of business development of foreign financial institutions can we truly achieve fair competition between domestic and foreign capital and ultimately achieve the goal of high-level opening up to the outside world.
Dong Ximiao, senior researcher at the Chongyang Institute of Finance of Renmin University of China, said that the shortcomings in laws and regulations must be filled as soon as possible. "At present, the laws and regulations of China's financial system have been relatively complete, but some areas have relatively low levels, and many are administrative regulations, and there is a lack of corresponding arrangements at the legal level. Therefore, on the one hand, the original laws and regulations must be revised and continuously promoted according to the opening process, such as the "Commercial Bank Law" and the "Regulations on the Administration of Foreign Banks"; on the other hand, the construction of laws and regulations must be improved."
(Editor in charge: Zhao Yazhi)
