Chinese Market Update - 31 January 2024

Further opening up of foreign investment in the financial sector

Xiao Yuanqi, deputy director of the National Financial Regulatory Administration (NFRA), told a press conference on 25 January that more than 50 opening-up measures had recently been introduced.  The limit on foreign ownership has been lifted, allowing foreign capital to hold 100% of the shares in banks and insurance companies.  In addition, all restrictions on foreign investment in the financial sector have been removed from the negative list.

Pudong New Area comprehensive reform pilot implementation plan

On 22 January, the General Office of the Central Committee of the Communist Party of China and the State Council released the Comprehensive Reform Pilot Implementation Plan for Pudong New Area (2023-2027) (Plan).  According to the Plan, Pudong New Area will be given more autonomy in key areas and critical reform measures, thereby facilitating the implementation of more profound reforms and a higher level of openness.

The Plan highlights the goal of building an open economic system in line with international standards.  The Pudong New Area aims to take the lead in advancing institutional opening, including rules, regulations, management and standards.  The plan advocates more extensive stress testing to improve synergies between domestic and international markets and resources.  It aims to serve as an experimental ground for exploring experiences in institutional opening across the country.  Specifically, the plan mentions, "exploring the systematic relaxation of foreign access restrictions in markets such as telecommunications services and healthcare, among others, in an organised manner."
 

Shenergy completes business registration with registered capital of RMB10 billion

Shenergy Property & Casualty Insurance (Shenergy Insurance) has completed its business registration on 16 January 2024, with registered capital of RMB10 billion.  Sheng Yafeng, the legal representative of Shenergy Insurance, was previously the head of the takeover group of Tian'an Property Insurance.

Shenergy Insurance is expected by the market to take over Tian'an Property Insurance, which was placed under control of the China Banking and Insurance Regulatory Commission (CBIRC), the predecessor of the NFRA in July 2020.  At that time, in addition to Tian'an Property Insurance, the CBIRC also took over Huaxia Life Insurance, Tian'an Life Insurance, and Yi'an P&C Insurance.

In 2023, Huaxia Life Insurance and Tian'an Life Insurance were acquired by Ruizhong Life Insurance and Zhonghui Life Insurance respectively.  Yi'an P&C Insurance was acquired by BYD, a Chinese automobile manufacturer.

Shenergy Insurance is owned by eight state-owned companies, including Shenergy Investment, Shanghai International Group, Shanghai Lingang Yuanjin Investment, Shanghai Lingang New Area Private Equity Fund, etc.

ERGO establishes brokerage company with FESCO

On 24 January, ERGO-FESCO Insurance Brokerage, a joint venture between the German ERGO Group and Beijing Foreign Enterprise Human Resources Service Co Ltd, held its opening ceremony in Beijing.  The company differentiates itself by offering a comprehensive one-stop insurance brokerage service model that includes "insurance brokerage + health insurance TPA + health management".

The ERGO Group has strategically invested in Taishan Property & Casualty Insurance and also owns ERGO China Life Insurance.

China issues silver economy policy to improve the welfare of the elderly
 

On 15th January, the General Office of the State Council issued the "silver economy" policy.  Among other things, the policy mentions enriching the development of financial products for the elderly.  It supports financial institutions to develop the pension financial business in accordance with the law and to provide services such as pension financial planning and fund management.  It also encourages financial institutions to develop commercial pension insurance, commercial medical insurance, commercial long-term care insurance, etc.

Click here to download the PDF version