China Market Watch: Insurance Industry and Shenzhen-Hong Kong Stock Connect

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China-market-watch

China to Become the World’s Second Largest Insurance Market

China is expected to become the world’s second largest insurance market this year, overtaking Japan, owing to the rapid increase of the middle class. The China Insurance Regulatory Commission has reported that China’s premium income reached RMB 1.9 trillion in the first half, up 37.3 percent on the previous year. This growth rate has accelerated fast, compared to 17.5 percent in the first half of 2014 and 20 percent in the first half of 2015. There are now 330 million policy holders in China, triple that of stock investors, and with a lack of insurance companies and products, China’s insurance market has a lot of potential.

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Shenzhen-Hong Kong Stock Connect Approved

China’s State Council has approved the implementation plan of the Shenzhen-Hong Kong Stock Connect. In 2014, the Chinese government launched the pilot Shanghai-Hong Kong connect to test the waters, which has achieved steady performance since its initiation. While strengthening ties and cooperation between Hong Kong and the mainland, it will also allow investors to share the benefits of economic developments in both territories, and also for Hong Kong to consolidate its place as an international financial center. The Shenzhen-Hong Kong Stock Connect is the latest step in China’s opening up of the financial sector, an important measure to improve the sector’s international competitiveness.

Restaurant Business: Competitive Market Offers Opportunities and Challenges

China’s catering service market reached RMB 3.23 trillion in 2015, growing by 11.7 percent from the previous year, according to the China Cuisine Association. The improvement in the purchasing power of the rising middle class has encouraged people to dine out more frequently. However, challenges come along with potential opportunities as the market becomes more competitive. The key for foreign players to succeed in China’s catering market is to identify the needs of the clients and the current trend in the market. With cities continue to transform, large international restaurant chains are poised for a further growth through brand recognition, experience sharing, buying power and extensive support networks.

Baby Care Manufacturers and E-commerce Platforms Eying Booming China Market

On the heels of China’s enforcement of two-child policy, demand for baby care products is on the rise, especially for those brands from the U.S. and Europe. It is estimated that the market for maternity and baby products has reached RMB 2.3 trillion last year, of which 15. 6 percent was accomplished through online platforms. The favor for international brands stems from the perception that these brands have higher quality, safety standards, and functionality. Such market trend encourages e-commerce giants to cooperate with overseas baby care products companies. Amazon China, as an example, is trying to seize the business opportunities by expanding its selection of baby products from formula to cover diapers or nappies.


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Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email china@dezshira.com or visit www.dezshira.com.

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