US-based insurer American International Group has revealed that it does not intend to diverge from its special business status in China by entering into joint ventures.
The insurance provider currently enjoys special dispensation in China, in that it is allowed to hold full ownership of a subsidiary operation in the country. All other foreign investors in the financial services sector are limited to a maximum of 20% ownership in a Chinese company, essentially meaning that any foreign company, with the exception of AIG, must operate through joint ventures.
AIG was created in China in 1919 and was the first insurer to return to the Chinese sector after foreign banishment in 1992. AIG’s agreement with the Chinese government pre-dates the current regulations put in place to maintain a level of domestic control in an increasingly open market in 2001.
Due to this unique standing, the company’s new chief executive officer Martin Sullivan has stated that AIG will look to develop its Chinese business through the expansion of its wholly owned subsidiary instead of looking to external collaborations.
Mr Sullivan was cited by Reuters: We would like to expand our branch operations on a wholly-owned basis. We’re in constant dialogue with the insurance regulator, and I hope to visit him very soon in Beijing.
AIG currently has operations in eight Chinese cities.