by Daniel W. Gerber and Richard J. Ahn
This commentary discusses the headway that Chinese insurers have made in their short history of existence, the implications of the rising Chinese insurance industry, and the potential they have on insurers and practitioners globally. This commentary was prepared by the co-chair of Goldberg Segalla's Insurance Services Practice Group, and co-authored by another member of the Group with deep knowledge of Asia and aspects of its insurance industry.
It has been exactly 35 years since the Deng Xiaoping led reformists forever changed the landscape of China's role and interplay in the global arena. In December 1978, upon obtaining power, Deng began instituting a social market economy, eventually leading to open doors for foreign investment and the creation of businesses. Along the way, the private sector emerged to the tune of accounting for 70% of the country's gross domestic product. Fast forward three decades, China has been ranked one of the largest exporters in the world with a market share of 8.9% in 2007, second to just Germany with 9.7%. Additionally, China was among the top importers the same year, third to only the U.S. and Germany. China's global prominence is further exemplified by the ranking of ICBC (a government-controlled Chinese bank), as the world's biggest public company this year, followed by China Construction Bank at the number two position. This is due in no small part to China's population, the highest in the world. Although their population is expected to be surpassed by India in the future, China's increased presence, globalization, and prominence in a multitude of industries is undeniable. The implementation of a market based economy has also led to domestic stability by, for instance, reducing the number of people in poverty. This is remarkable given that the number of people in poverty in the rest of the world actually rose by 13 million people from 1980 to 2008, approximately the same time span that China's market reform took place. Nevertheless, its growth and expansion in just over three decades has led to an obvious position of global power on numerous fronts, least of all on the global marketplace. [footnotes omitted]
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Daniel W. Gerber serves as co-chair of Goldberg Segalla LLP's Global Insurance Services Practice Group. He maintains an international practice in complex insurance coverage and reinsurance matters.
Richard J. Ahn is Special Counsel with Goldberg Segalla and is involved with firm insurance matters as they concern Asia. Both authors practice in Goldberg Segalla's Global Insurance Services Group.