Entry threshold for Hong Kong insurance companies that seek to open business in the Qianhai-Shekou Free Trade Zone in Guangdong, China will be relaxed, a Chinese government official revealed recently.
Wang Jinxia, assistant director-general of the Qianhai-Shekou Administrative Committee, said the insurance sector is the trade zone’s thrust area in 2016, the South China Morning Post (SCMP)
According to the report, Hong Kong-based companies need to have over US$5 billion of total assets before they can set up shop in the Qianhai-Shekou Free Trade Zone.
The report said the companies’ headquarters should have been in the insurance business for at least 30 years and their representative offices in China should have been operating for more than two years.
Wang said no Hong Kong insurer has met these requirements.
“We are in talks with the People’s Bank of China and the China Insurance Regulatory Commission to lower the three requirements for Hong Kong firms,” the SCMP
quoted Wang as saying.
Hong Kong insurers are not jubilant, however, as they want to get more incentives and be treated like big global companies.
“If the relaxation only allows Hong Kong insurance companies to set up in Qianhai for residents there, it won’t be attractive,” Chan Kin-por, a Hong Kong lawmaker representing the insurance sector, told SCMP.
Chan said it would be “very attractive” if Qianhai-based Hong Kong insurers are allowed to do business in the entire China or at least in Guangdong or some southern provinces.
“Right now only international big players are setting up shop in China. Hong Kong insurers would like to see the mainland regulator treating us like other local insurers, which need only a capital of 200 million yuan,” Chan said.
“Since Hong Kong is part of China, we should be treated like other domestic insurance companies.”