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Germany’s Allianz posted an article on its web site that sounds an upbeat note about doing business in China, and singles out Shanghai as the best place for banks and insurance companies to locate.
The report notes that Allianz first began doing business in China over a hundred years ago, and that in 1996 its Dresdner Bank subsidiary was the first German Bank to receive a license from Chinese authorities to establish a full-fledged branch. It now employs over 100 people in Shanghai.
Allianz already has a life insurance subsidiary operating in China, and has plans to move into general insurance later this year. The report noted that, “The reforms implemented in the 80s by then president Deng Xiaoping resulted in access to the country and its various industries. The state monopoly on property ended, and today only 30 percent of GDP is generated by public sector companies.”
The northeastern city of Shanghai, which was the financial center for most foreign companies before World War II and the 1949 revolution, has regained its primacy as a business center. “Ten years ago, Deng Xiaoping said that ‘„Shanghai should assume economic supremacy in China,’ and accordingly established a special financial zone in the Pudong district, on the other bank of the Huangpo river. Pudong has since become (in addition to Shenzhen in South China) the country’s largest and most important financial zone,” said the bulletin.
Dresdner Bank manager Bernd Scheirmann, however, warned against being too confident about opportunities in China. “The market is often overestimated and purchasing power tends to be associated with the total population of 1.3 billion. This is deceptive. Although there are 640 large cities in China – over 30 of which have a million inhabitants each – the majority of people live in rural areas where poor infrastructure means poor accessibility. Western regions are even more isolated, ” said the report.