Beijing is allowing a domestic insurance company to bring in foreign investment partners, raising hopes it will further open its tightly controlled insurance market soon.
Individual foreign investors are allowed to own up to 5 per cent and a combined total of up to 20 per cent of Taikang Life Insurance, a small Beijing-based domestic firm.
Under a State Council ruling, Taikang, one of the country's five home-grown national life insurance companies, has six months to find partners.
Three years ago, Shenzhen-based Ping An Insurance won approval to sell stakes to foreign investors.
Morgan Stanley Dean Witter and Goldman Sachs together own 6.77 per cent of Ping An.
Industry analysts expect Beijing to allow more domestic insurance companies to partner foreigners, opening the way for greater foreign participation in the market expected to be worth US$30 billion next year.
Beijing has permitted Taikang to enlarge its share capital from 600 million shares to one billion shares, including 200 million shares of foreign capital, the Beijing-based Economic Daily reported yesterday.