China Research

Many foreign analysts are complaining about insufficient speed, volume and transparency when it comes to reforms of the (domestic) Chinese banking sector. Sure, such criticism may be motivated. It certainly is more urging to ambitiously reform the lagging domestic banking industry than speeding up the attempt of making the yuan an internationally widely used and acknowledged currency.

If one regards transparency of the banking sector and the official institutions behind it as poor, it certainly must be concluded that transparency of Chinese insurance business and insurance institutions is even much more insufficient. Particularly foreign insurance firms are waiting for more fairness, also pointing at the uneven application of regulations on domestic and foreign insurance companies. Foreigners feel discriminated.

To be honest, I do not consider Western insurance companies as very transparent either. However, I see transparency of the Chinese insurance business far behind the Western all the same. And this shortcoming is even more pronounced what concerns insurance products. China is an extremely underinsured country. The Chinese deserve better insurance options, even if not the whole people initially can benefit from all the necessary reforms (which, however, hopefully will not happen too far away).

Hubert Fromlet
Senior Professor of International Economics, Linnaeus University
Editorial board

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