Through these, and the social security and healthcare system reforms, more economic and social responsibility is being shifted from the state to individuals and enterprises. Deepening capital markets have also been identified as a key component of the financial sector reform. The ability to mobilise large pools of savings to ensure a more efficient use of funds is essential for maintaining sustainable economic growth. This has prompted the Government to step up measures to boost the country s stockmarket. A number of stimulus measures has already been implemented, such as allowing the sale of state-owned shares and legal person shares, and allowing investment in the stockmarkets by SOE finance companies and insurance companies.
Globalisation serves as another stimulus for the transformation of the insurance market.
China is expected to enter the WTO by the end of 2000 or early 2001. These concessions, if implemented, will potentially reshape the competitive landscape of the domestic insurance industry. The pace has accelerated following the signing of the WTO trade agreements late last year. More regulations are in the pipeline, including areas such as foreign insurance companies, solvency supervision and reinsurance. To further strengthen supervision, CIRC plans to set up regional offices in all major cities across China.