According to several news reports, an official of the China Insurance Regulatory Commission (CIRC) told reporters at a news conference on June 11 that American International Group wouldn’t receive any more licenses for its subsidiaries unless they were at least 50 percent owned by a Chinese partner.
The official refused to be named or quoted directly, which indicated to many observers that he wasn’t announcing a firm CIRC decision. The subsidiary ownership question held up China’s accession to the World Trade Organization for some months, as European negotiators sought changes to eliminate what they felt was an unfair trade advantage, as AIG is the only foreign insurer with the right to establish wholly owned branch operations in China. All others must have at least half of the operation owned by a Chinese partner.
AIG eventually agreed to limit, but not eliminate, the number of wholly owned subsidiaries it operates in China, but the scope of this accord is quite vague. AIG has continued to receive licenses without the 50 percent requirement, most recently when it opened a mush coveted office in China’s capital, Beijing. This would indicate that it might still benefit from its “grandfather clause” in its agreements with the Chinese.
One thing’s sure – AIG’s CEO Maurice “Hank” Greenberg isn’t about to surrender the company’s rights without a fight. He defended the advantage at the press conference following the opening of the Beijing office, stating, according a to a report from Dow Jones Newswires, that “We came to China more than 20 years ago and provided many things for China and worked very hard for U.S. and China relations. Where were the other foreign companies 20 years ago? If they want to continue to complain, I’ll give them a large crying towel.”|”china, may, limit, aig’s, subsidiary, ownership
Was this article valuable?
Here are more articles you may enjoy.