BEIJING – China paved the way for foreign companies before the summit with President Trump and other Western leaders. China paved the way for the German insurer Allianz SE.

With the meeting of the group of 20 leading economies that will open Friday, the month of commercial battle with the United States and the growing criticism of China's business practices in Europe is putting pressure on Chinese President Xi Jinping.

In recent weeks, Chinese regulators have allowed

American Express
Co.

at set up card clearing services and blessed

United Technologies

Body $ 23 billion takeover of aircraft parts manufacturer

Rockwell Collins
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The insurance and banking regulator announced Sunday that it had received Allianz's request to establish what it believed would be the country's first fully foreign-owned insurance holding company. Allianz said that the approval would allow it to expand its investment in China.

An insurance holding company reports wide access to the Chinese insurance market compared to an entity wholly-owned by life insurance or property and casualty insurance companies Based in Hong Kong

AIA Group
,

It is the only foreign company operating without a local partner in the Chinese life insurance market, which can only operate in certain cities.

A regional economic summit ended in mid-November as China took a more aggressive stance, suggesting that any path to a possible trade deal with the United States would be complicated. Composite photo: Sharon Shi

Monday, French insurance company

AXA
HER

announced that it would acquire full control of its Chinese property and casualty insurer, AXA Tianping Insurance and Casualty Insurance Co.

China has long promised to expand this access, for a long time already to foreigners, often during decades of negotiations, but the Beijing ads openings in financial services and cars have been ruled out by the United States

"China is trying to show the world its openness, but it's even harder to believe that the world will do that," said Jonas Short, head of Beijing's Everbright brokerage firm Sun Hung Kai.

Much of the attention at the G-20 Summit in Buenos Aires will be on President Xi meets with President Trumpshould cover the means of mitigate trade tensions that have undermined global markets and threaten the global economy.

Responding to President Trump's criticism of China's trade surplus and policies, particularly with regard to technology transfers, Xi introduced China as a supporter of the global trading order and emphasized its commitment to liberalize Chinese markets.

By allowing a new German entrant to be the first to move to a fully foreign-owned insurance holding company, Beijing could try to improve its credibility in Europe as a counterweight to the United States, according to some Chinese observers . Vice Premier Liu He, Economic Affairs Specialist for President Xi, is in Germany for a China-Europe forum before heading to the G-20.

MetLife Inc. and

Chubb
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, global companies with US roots, have shown interest in expanding their operations in China. Each of them has a joint venture, MetLife with Shanghai Alliance Investment Ltd., a public company. and Chubb with the Huatai Insurance Group.

A spokeswoman for MetLife said the company wanted to sell more insurance products in China, but declined to say whether it wanted to increase its stake in its life insurance business or start a new insurance company. portfolio held 100%. Chubb did not respond to the request for comment.

The increase in AXA's interest in its current 50% interest is still subject to regulatory approval, according to the company. This expansion is important because its property and casualty insurance business covers some twenty provinces in China.

For foreign insurers, a wholly-owned holding company is a step toward consolidating units offering different types of insurance, including possibly wholly-owned life insurance units.

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The 100% owned life insurer is the legacy of the early 90's Hank Greenberg, then head of AIG, who used his close ties with Prime Minister Zhu Rongji and other top Chinese leaders to get a preferential treatment.

Foreign-invested insurers accounted for less than 6 percent of China's $ 527 billion in premium income in 2017, according to official data.

Although foreigners may own 100% of a property insurance business in China, the limit is 50% in life insurance. Last November, Beijing pledged to raise the ceiling to 51% in three years and eliminate it completely in five years.

The opening of Allianz, although a step forward, is not enough to offer the life insurance that foreign companies want, said some analysts and leaders. A separate authorization will be needed to increase his participation in his life insurance unit, they noted. Allianz owns 51% of a life insurance joint venture with Citic Trust – an exception to the 50% cap – and a 50% interest in a property and casualty insurance business with

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.

The latest measure simply signals Beijing's intention to allow a foreign company to consolidate its operations in China, said Jacob Parker, vice president of the American Council of Chinese Affairs, a professional association.

"The Chinese government wants to signal measurable progress in market openings, but this argument would be much more convincing if it would have granted a majority stake in a foreign life insurance company," she said. he declared.

Allianz has announced plans to establish the holding company in Shanghai next year. A spokeswoman for Allianz declined to say whether the Chinese authorities would allow her better access to life insurance.

Write to Chao Deng to Chao.Deng@Good Assurance