This will result in a cut in the amount of funds in the hands of domestic banks. The toughest challenge the government will face will be to eliminate bad debt , implement cautious and standard risk management models, and tighten up bank administration so that domestic banks can adapt to international competition. To cope with these challenges, some domestic banks will choose to partner with foreign banks. This will allow foreign banks gain a foothold in the Chinese monetary market, allow domestic banks to learn from foreign peers and allow domestic banks to obtain a greater pool of funds from their foreign partners. China's insurance industry, like the banking industry, will face challenges.
Most life insurers are responsible for paying out much more than a return on investment.
China's life insurance industry is dominated by a few insurers. The lack of professional administrators with sharp eyes has led to poor performance in this industry. Chinese insurers lag far behind their foreign counterparts in terms of service quality and professionalism. Insurers must strive to provide services that are on par with those offered by competitors so that they can adapt to international competition. Unlike the banking industry, the insurance industry is smaller, so it faces fewer risks.