The Research On The Insurance Industry's Utilization Of Foreign Fund In China

With the reform and the opening to the outside world, our utilization of foreign direct investment (FDI) makes great achievement. Until Dem. 2005, we utilized about 1325 billion US dollars foreign fund in the signed contracts, and in fact, the utilization of foreign fund was about 662 billion US dollars. The foreign fund which promoted the development of social economy and industrial structure didn't only add our construction fund, as a developing country, but also bring us the advanced technology and experience of management. When more and more foreign fund was brought to China, we could utilize foreign fund in many different fields, and at the same time, the emphasis of FDI transferred to the service industry. This paper does the research of utilization of foreign fund in the insurance industry.When our country got the great achievement of utilization of foreign fund, our insurance industry entered into the new developing period, the income of insurance premium increased by 30% every year, and the depth and density of insurance increased strongly also. After entering the WTO, many famous insurance MNCs (Multinational Companies) had to enter into the Chinese market, because of 1.3 billion people, increasing insurance demand and strongly opening to the outside world. These foreign companies set up wholly foreign owned enterprises or joint ventures, and invested in the Chinese insurance company, so more and more foreign capital enter into our insurance industry. Three foreign-fund insurance companies including Haier and NEW YORK LIFE company got the licenses of joint ventures of life insurance from the China Insurance Regulatory Commission (CIRC) on the day that China entered into WTO. According to the statistic data of CIRC, until Dem. 2004, there were 41 foreign-fund insurance companies and 188 offices of foreign insurance companies. These institutions came from 18 countries and areas, and the amount was more than Chinese insurance companies.This paper first does the research of necessity of utilizing foreign fund. Comparing many problems in the development of our insurance industry with the advantage that foreign-fund companies have, we know that learning from the experience of foreign-fund companies is necessary. And the great chance given by utilizing foreign fund also lets us know the necessity.Secondly, it tells us the situation and features of utilization of foreign fund in the insurance industry. Show up the operation situation of foreign life insurance companies and foreign property insurance companies independently. On the basis of the analysis, we know the four features of utilizing foreign fund.Then it does the feasibility study of utilization of foreign fund. The demands of development of international insurance industry, our good development of macro-economy, competitive environment in our insurance industry and the support form China government provide the feasible factors of utilizing foreign fund. The empirical analysis of utilizing foreign fund and the successful experience also tell the feasibility.At last, according to problems in the process of utilizing foreign fund, this paper gives the proper advice.