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Wednesday, 26 September, 2001, 08:30 GMT 09:30 UK
Dutch insurer wins China licence
Aegon website
Aegon forecasts rapid growth for its new China unit
Dutch insurer Aegon has won a licence to conduct life insurance business in China.

The European Union has been pressing the Chinese authorities for months to allocate the final of seven new licences for EU firms under their agreement on China's entry to the World Trade Organisation (WTO).

Aegon said it will set up a 50% joint venture in China through its Transamerica subsidiary and sees rapid expansion in the business.

"Initially, the licence will allow the joint venture to sell individual life insurance policies in one major Chinese city, but the scope of the operation is expected to expand rapidly in the next few years," the firm said.

Aegon said it is in talks with a number of Chinese companies and expects to conclude these negotiations in 2002.

Unfair advantage?

China's trade minister has reassured EU officials that American insurance companies will not get preferential treatment in China.

China is expected to join the WTO by early next year.

The final entry documents were agreed earlier this month and could be rubber-stamped at a meeting of all 142 WTO trade ministers scheduled for Qatar in November.

The issue of insurance licences played a prominent role in the final stages of talks over China's accession, with EU negotiators objecting to what they said was an unfair advantage for US insurance giant AIG.

AIG has 100% ownership of its existing China operations, but China only agreed to 50% ownership for new businesses.

China's trade minister, Shi Guangsheng, discussed the dispute with EU trade commissioner Pascal Lamy at a meeting on the fringes of the EU-China summit in Brussels on 6 September.

See also:

05 Sep 01 | Europe
Brussels hosts China talks
04 Sep 01 | Europe
Trade dominates EU-China talks
10 Jul 01 | Business
China concedes in WTO talks
15 Dec 00 | Business
Red tape 'helping China overtake EU'
27 Jan 01 | Asia-Pacific
China arrest in Dover deaths inquiry
11 Oct 00 | Asia-Pacific
China backs anti-trafficking plan
17 Sep 01 | Business
China enters WTO fold
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