A British firm soon will be permitted to enter China's potentially lucrative insurance market, Chancellor of the Exchequer Kenneth Clarke says. The insurer would be given a licence to operate in select Chinese markets 'in the not-too-distant future', he said yesterday. 'Beyond that, I am not sure how wise it is for me to be more specific,' he said after talks with Finance Minister Liu Zhongli , and central bank governor Dai Xianglong . In December, Winterthur Swiss Insurance Co became the first European insurer licensed to operate in Shanghai, with restrictions on sale of life policies. American International Group and Tokio Marine and Fire Insurance Co have been licensed to operate in select mainland markets since 1992, while Canada's Manufacturers Life entered an agreement in May last year to launch the mainland's first joint life insurance venture with China National Chemical Import & Export Corp. 'We think we could make a contribution in the fields of insurance and more sophisticated savings vehicles like mutual bonds,' Mr Clarke said. He said he pressed state planners to ease restrictions on foreign financial institutions, which are forbidden from competing directly with state-run banks. 'It is more desirable for the Chinese than it is for the British, really,' Mr Clarke said. 'It is the Chinese economic world that will benefit from the admission of more players of international quality.' Hongkong and Shanghai Banking Corp and Britain's Standard Chartered Bank are among eight foreign institutions allowed to conduct yuan business on a trial basis in Shanghai this year. 'The government of China is being extremely cautious in opening up its banking and financial services,' Mr Clarke said at the end of three days of talks with Beijing authorities. He said Chinese and British officials agreed to greater co-operation on regulatory issues, and anticipated more listings of mainland companies in London. Beijing Power Generation Co (Datang) is expected to begin trading this month as China's first direct equity listing in London. 'I am quite happy to accept most Chinese listings will be in Hong Kong, but I think there will be a significant number in London as well.'