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Nod to buy into insurance firm

By Wang Zhenghua (China Daily)
Updated: 2008-05-06 10:27

A cyclist rides past a Shanghai Anxin Agricultural Insurance office in Shanghai in this file photo. Shanghai International Group, the investment arm of the municipal government, has been approved to buy into a local insurance company in its bid to consolidate the city's financial assets and strengthen its role as a financial hub. [China Daily]

Shanghai International Group, the investment arm of the municipal government, has been approved to buy into a local insurance company in its bid to consolidate the city's financial assets and strengthen its role as a financial hub.

The company, a stakeholder in a number of Shanghai-based banks, fund, trust and securities companies, has been approved by the China Insurance Regulatory Commission to inject 97.5 million yuan into AAIC, the nation's first professional agricultural insurance firm, China Business News reported yesterday.

Shanghai State-owned Assets Operation Co, another State-owned firm, is the second largest shareholder with a 92.5 million yuan ($13.96 million) injection into AAIC, whose registered capital would be raised from 200 million to 500 million yuan.

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The move is seen as the municipal government's efforts to tighten control of its financial assets in a city that is increasingly competing with other financial hubs such as Hong Kong and Tokyo. According to the Chinese-language newspaper, AAIC, founded in September 2004, also floated new shares to its 11 old shareholders - all State-owned assets management companies in various districts of Shanghai.

The new share issue and capital injection have been put in place, the newspaper said, and AAIC could speed up its expansion with the capital. "It's ready to launch a branch in Zhejiang province, while an application for a branch in Jiangsu province has been submitted to the authorities," the report said.

The company declined to comment on Monday.

The largest shareholder of Pudong Development Bank, Bank of Shanghai, Shanghai Rural Commercial Bank and Guotai Jun'an Securities, Shanghai International Group also has controlling stake in Changjiang Pension Insurance Co, which manages 15 billion yuan of company pension funds held by its labor and social security bureaus.

It is also working on a partnership with overseas financial firms, consolidating its role in the financial sector. In an earlier interview, the group's President Ji Xiaohui had said his institution was planning to become a strategic investor instead of being a mere financial investor. The plan is pending the approval of the municipal government.

The city has laid down a road map for the international financial center goal: put in place the necessary infrastructure by 2010 and achieve the status by 2020. To that end, the municipal government has established a high-profile task force headed by the mayor.