Sign in Subscribe
China

China's WTO Accession Held Up by Swiss Demands

Strategic Insights

— 1 min read

China's accession to the World Trade Organization is being stalled by Switzerland's demand for improved access to the Chinese insurance and financial services market. Despite significant progress in securing bilateral trade agreements with other countries, including the United States and the European Union, China's unwillingness to grant Swiss insurers equal treatment to their European Union competitors has become a major obstacle. The Swiss government is seeking comparable concessions on insurance that the EU fought hard to secure, including the right for foreign insurers to hold majority ownership stakes in their Chinese-based life insurance ventures.

Key Takeaways:

  • China's accession to the WTO is being held up by Switzerland's demands for improved access to the Chinese insurance and financial services market.
  • China has concluded agreements with 35 WTO member countries that have requested them, but the Swiss agreement may prove more difficult to conclude.
  • The EU failed to win a key demand, the right for foreign insurers to hold majority ownership stakes in their Chinese-based life insurance ventures, but Beijing did promise to immediately provide seven new licenses for European insurers to operate in China.
  • Only one Swiss-based insurer, Winterthur, is so far licensed to operate in China, compared to five licensed European insurers.
  • Switzerland is seeking additional market access concessions related to other financial services, distribution rights, and commodity inspection.
  • China must also finalize with WTO members a protocol of accession setting out the terms for China's entry to the organization, a process that could delay entry into the WTO until next year.

Statistics:

  • 35: The number of WTO member countries that have concluded agreements with China
  • 7: The number of new licenses promised to European insurers by Beijing
  • 5: The number of European insurers currently licensed to operate in China
  • 1: The number of Swiss-based insurers currently licensed to operate in China (Winterthur)
  • 7 million: The population of Switzerland (a relatively small country that is home to some world leaders in insurance)
  • 2000: The year in which China's accession to the WTO is being held up by Swiss demands

Sources:

  • Geneva correspondent Daniel Pruzin
  • A. M. Best Company, Inc.
  • COMTEX (http://www.comtexnews.com)

Read more