For insurance, China now restricts foreign companies to operating in Shanghai and Guangzhou. China will expand the scope of activities for foreign insurers to include group, health and pension lines of insurance, which represent about 85 per cent of total premiums, phased in over five years. China agreed to allow 50 per cent ownership, remove onerous joint venture requirements on foreign life insurers and phase out internal branching restrictions. Life insurers may now choose their own joint venture partners. For non-life, China will allow branching or 51 per cent ownership on accession and form wholly owned subsidiaries in two years.
China imposes severe geographic restrictions on the establishment of foreign banks.
China has committed to full market access in five years for US banks. Foreign banks will be able to conduct local currency business with Chinese enterprises starting two years after accession. Foreign banks will be able to conduct local currency business with Chinese individuals from five years after accession. Both geographic and customer restrictions will be removed in five years. Non-bank financial companies can offer auto financing upon accession.