China Advances Financial Liberalization with New Approvals for International Insurers
In a significant move to further open its financial markets, China has granted regulatory approval to two major international insurance companies, AIA Group and Aegon Group, to establish wholly foreign-owned asset management subsidiaries in Shanghai. This development marks another milestone in China’s ongoing efforts to liberalize its financial sector and enhance its status as a global financial hub.
The approvals, announced by National Financial Regulatory Administration director Li Yunze at the 2025 Lujiazui Forum, underscore China’s commitment to creating a more open and competitive financial environment. AIA Group, based in Hong Kong, and Aegon Group, from the Netherlands, will set up their asset management companies in Shanghai, with AIA utilizing its mainland subsidiary AIA Life Insurance and Aegon planning to fund its operation through direct investment.
AIA Life Insurance, which was restructured from AIA’s Shanghai branch and began operations in 2020, became the first wholly foreign-owned life insurer on the mainland. The new AIA asset management company is expected to focus on enhancing the efficiency of managing the insurer’s funds, offering specialized investment management services, and expanding long-term investment capabilities. “The approval reflects AIA’s long-term commitment to the Chinese market and highlights the success of China’s high-level opening up of its financial sector,” AIA Life said in a statement.
This latest development follows similar moves by other international insurers. German insurer Allianz became the first to establish a wholly foreign-owned insurance asset management firm on the mainland in 2021, while US-based Prudential Financial opened a similar company in Beijing in February. These moves demonstrate China’s gradual and steady approach to easing restrictions on international financial firms as part of broader economic reforms.
The insurance asset management sector plays a crucial role in managing funds for insurance companies, investing premiums and reserves to generate returns while maintaining liquidity for claims payments. The entry of foreign firms brings international expertise and investment strategies to China’s growing insurance market, potentially enhancing its competitiveness and depth.
Shanghai, China’s primary financial center, hosts the country’s main stock exchanges and serves as headquarters for major domestic and international financial institutions. The city competes with Hong Kong, Singapore, and Tokyo as a regional financial hub. Li announced that regulators plan additional measures to support Shanghai’s development as a global financial hub, including encouraging pilot projects in financial technology and cross-border finance, as well as supporting eligible national banks in establishing financial asset investment companies in the city.
As China continues to open its financial markets, the move is expected to have positive implications for the country’s economic development and the global insurance industry. The latest approvals not only demonstrate China’s commitment to financial liberalization but also reflect the confidence of international financial giants in the Chinese market.
