NU Online News Service, Sept. 5, 4:30 p.m. – American International Group Inc., New York, says it has received firm assurances from China that AIG will not be required to reduce ownership of any of the company’s existing 100%-owned insurance operations in China.
China Insurance Regulatory Commission officials told AIG executives in a meeting that the company would not be forced to reduce any part of its 100% Chinese insurance operations, according to AIG.
The meeting followed a Sept. 4 report in the Wall Street Journal quoting anonymous CIRC sources as saying that AIG would be required to relinquish its existing 100% ownership rights as a condition for China gaining admission to the World Trade Organization.
Reuters has published reports indicating that CIRC officials are still planning to let AIG keep 100% ownership rights.
Officials at the China Ministry of Foreign Trade and Economic Cooperation confirmed that China has agreed to preserve AIG’s existing 100% ownership rights in China and plan to allow AIG to continue to operate in the same way that it is now operating in China, according to a Reuters report.
AIG’s wholly owned operations in China have been a point of contention between the European Union and the United States over finalizing conditions for China’s entry into the WTO.
Under the WTO entry agreement, new life insurance businesses entering the Chinese market must be at least 50% Chinese-owned.
The question of how China would treat new AIG branches in China is especially controversial.
AIG and the United States say any new Chinese branches would be part of the existing company, but the European Union insists new branches would be new businesses subject to the 50% Chinese ownership rule.