The bankers' version of the old adage about the profits to be had in China is experiencing a revival among foreign financial services firms: Colossal profits await if only every Chinese household would borrow for a home or auto purchase, buy home and life insurance, and invest in mutual funds, retirement accounts, and college tuition savings plans. True, China's financial industry is undergoing ambitious liberalization as a result of the country's World Trade Organization (WTO) commitments and broader internal reform. But it is just as true that China's opening will not spell instant profits for foreign companies, as the pace and scope of liberalization will depend on both cautious regulation and commercial realities.

China's financial reforms race ahead,
but a note of caution sounds for foreign investors

PRC regulators, to put it bluntly, fear that too many new market entrants in too short a period of time will break China's fragile financial industry. Since China's WTO entry, regulators have set requirements for registered capital and operating funds, and capital-adequacy ratios for branches of foreign-invested financial ventures, at sky-high levels. The message is clear: Only large, global players willing to commit large dollar amounts up front will be allowed to play initially. But this same message is also a great leap forward--foreign banks, insurance companies, and investment banks that meet these requirements are being licensed to operate under a transparent process and within a set period of time.

Though many potential foreign entrants are chomping at the bit to launch operations, the majority of multinational players are unlikely to plunge headfirst into the market. Few, if any, companies will find it commercially viable to launch operations in more than a handful of cities without first developing a revenue base and cultivating internal staff capabilities. Companies that buy into existing PRC financial companies will be equally hard-pressed to commit to their China operations the level of funds necessary for immediate management control nationwide. But the experience of firms already operating in China has been positive thus far--Chinese companies and consumers are beginning to welcome and even demand the financial tools and expertise that foreign financial companies possess.

Two contrasting trends, then, are emerging: Foreign companies are excited by the epic expansion of financial services opportunities in China; and this exuberance is tempered by a rational assessment of the difficulties of earning profits in an immature market governed by cautious financial regulators. A brief sector-by-sector review of how these trends are guiding foreign investment and which firms are making early moves indicates where the sector is headed in the short to medium term. But first it is necessary to understand the forces driving the PRC leadership to liberalize the financial market.

China's moribund state banking system has borne much of the financial burden of the country's impressive economic achievements during the reform era. In particular, the use of government-directed policy loans to state-owned enterprises (SOEs) during the 1990s undermined the ability of the state banks to lend on commercial terms, distorting the allocation of resources and leading to an enormous buildup of nonperforming loans (NPLs) and high cost-to-income ratios. Government control over the selection of companies to list on China's stock markets similarly undermined the development of transparent capital markets, responsible management, and credible financial information. The government tolerated immature capital markets, lack of institutional investors, and widespread market-rigging as long as other sectors of the economy were plowing ahead.

Foreign banks will not be in a position to win significant market share in the short term and will not necessarily engage in expensive branch expansion until staff and systems are in place.

But China's leadership, especially since the Asian financial crisis, has come to recognize that an unreformed financial sector threatens the overall momentum of the reform process and economic growth. In recent years, the leadership has taken steps to corporatize banks, write off unrecoverable NPLs, and tighten regulation of listed firms (see The CBR, May-June 2001). Such attempts reached a new height in 2001, when China instituted dozens of supervisory mechanisms and reporting requirements to bring order to the country's casino-like markets. The China Securities Regulatory Commission (CSRC) is leading these efforts. Though others within China's financial elite have effectively pressured CSRC to step back from some liberalizing moves (arguments strengthened by the failure of oversight in the Enron case), the momentum remains clearly positive.

China's regulators are committed to institutionalizing supervisory and financial managerial mechanisms to drive China toward a mature financial system in line with international norms (see Table). But as in other sectors, the introduction of foreign expertise and the licensing of foreign entrants do not necessarily make for profitable business opportunities for foreign firms. Before they create successful market-entry strategies, foreign firms must take the following PRC motivations and aspirations into account:

Wanted: Foreign entrants
China's leadership recognizes that foreign participation in the full range of financial services is essential to the development of a mature financial industry. The country seeks foreign expertise to help create a workable pension system, institute credible auditing systems, run investment banks, and operate mutual funds. The realization that reform cannot be delayed and that domestic financial players should be subjected to real competition is behind the drive to open financial services to foreign investment on a specific timeframe.

PRC regulators hope that foreign participation in this sector will also help create a pool of financial professionals, and with them institutional investors and credible information reporting. In a parallel trend, mainland regulators have recruited several seasoned financial professionals from Hong Kong and elsewhere to join the PRC regulatory ranks.

Regulators will soon approve domestic listings of foreign-invested companies, which will force wholly domestically owned companies to seek competitive advantage through transparency and profitability. Though a late-2001 order requiring all listed companies to submit to audits by foreign accounting firms has been rescinded, the clear implication is that domestic companies need to shape up or close shop. Opening the sector to foreign entrants is a tool for, not the motivation behind, financial sector reform.

Stability
The miracle of China's reform process is that radical change has occurred through incremental liberalization. The country's leaders have avoided, at all costs, shock treatment and other policies that might throw reform off track. China's reform path has been and will continue to be fundamentally pragmatic.

One primary fear of regulators is that an influx of foreign financial firms will cripple domestic companies that have not adequately restructured or that are saddled with remnants of social rather than commercial functions. Chinese banks, which are technically insolvent with as much as 50 percent of loans estimated as unrecoverable, rely on their monopoly on individual savings deposits for survival. Both banks and insurance companies are overstaffed, and excessive branch networks--though they are being heavily scaled back--burden these institutions with significant fixed costs. The prospect of trim, cash-rich foreign firms competing for the same Chinese customers as domestic banks has regulators preparing to batten down any hatches not propped open by China's WTO commitments.

A related PRC goal is to limit the initial number of foreign entrants. This goal reflects the PRC penchant for testing programs on a small scale before broadening implementation, lest too many players begin to move in directions not anticipated by policy planners. Though foreign companies will rightly ask why China should care if foreigners invest and fail, the real issue is that China fears that any failure in the financial sector could threaten the momentum of progress. China's financial system has a young, incomplete, untested legal framework that regulators fear could be destabilized if significant enforcement failures occur early on. China is also using initial foreign entrants as guinea pigs to tweak policies and institute bureaucratic processes to oversee new and complex businesses.

Corruption
The issue of corruption within China's financial system took on a new urgency following the 2001 emergence of a corruption scandal within the Bank of China (BOC) that extended to the top BOC leadership. Chinese economist Hu Angang estimates that publicly admitted corruption in the financial sector totaled more than 6 percent of the value of China's GDP in 2000.

Corruption has long been a top worry. The failure of provincial trust and investment companies in the late 1990s undermined China's financial credibility. Market rigging by fund managers, extortion of company funds by listed firms, and highly complex pyramid schemes flourish in any space not brought under the PRC regulatory microscope. The prospect of opening new businesses to a large number of entrants understandably has authorities wondering whether they can cope. Already in 2002, an illegal representative office posing as a European bank was discovered and closed in Beijing. The natural inclination of regulators is to institute even more stringent documentary processes lest larger financial scandals threaten system integrity.

National security
A final concern of PRC regulators is state security. China has long been sensitive about releasing financial information to the outside world and considers such information vital to national security. The most sensitive issues are perhaps the true amount of NPLs, which SOEs are worst off, and the true pension shortfall, as well as the potential conflicts between official and individual bank statistics. Successful reform will require the release of this information to potential foreign partners, investment banks, and fund managers. This is a big step that Chinese officials are, as yet, unwilling to take. Other related, nationalistic concerns include the worry that the deposit of PRC companies' and citizens' savings and pensions into foreign banks and insurance firms (even though kept within China) will somehow put the country at the mercy of foreign financiers.

Though China's WTO accession documents detail the country's financial market liberalization, Chinese government policies will continue to play a dominant role in shaping foreign company operations. China's control over interest rate policies and foreign exchange for capital account transactions further circumscribe foreigners' quests for profitability.

Banking
All restrictions on foreign bank participation in foreign-currency business were removed when China became a WTO member. Foreign exchange business opened to foreign entrants, though State Administration of Foreign Exchange controls on the conversion of the renminbi (RMB) remain. China has committed to a specific timeline to open RMB and foreign-currency services to foreign financial institutions. Banking operations phase in by client type (foreign-invested client, Chinese company, Chinese citizen) and by city.

For RMB business, foreign financial companies could provide services to foreign clients upon accession; beginning December 11, 2003, they will be allowed to serve Chinese companies, and by December 11, 2006, all Chinese citizens. Shenzhen and Shanghai (which were already open to more than 30 trial operations for RMB lending) were formally opened to foreign financial firms upon accession, along with Dalian in Liaoning, and Tianjin. More cities will be added until all geographic restrictions on RMB services are removed, which must occur by December 11, 2006.

China's overarching regulation guiding commercial banking operations is the Regulation on Management of Foreign-Invested Financial Institutions (State Council Order No. 340) and its implementing rules. Release of these rules in late 2001 sent shockwaves through the foreign financial community, as they ratcheted minimum requirements for the injection of registered capital and operating funds dramatically upward. These changes, combined with basic asset requirements detailed in China's WTO commitments of $10 billion in global assets for subsidiary or joint venture operations and $20 billion for foreign bank branches, significantly limit the number of potential foreign entrants. The rules also lay out a detailed matrix of services (client and foreign/local currency), venture type (subsidiary, wholly foreign-owned, or joint venture), and entity (bank or financial company) with corresponding minimum investment levels starting at $30 million and reaching as high as $120 million, though a portion of this capital may be injected using RMB.

Several other regulatory requirements restrain the growth and profitability of foreign banks. For one, all banks must now adhere to the government-set band for foreign-currency deposit interest rates. PBOC extended the restraints on PRC residents' foreign-currency deposits of less than $3 million to foreign banks in March 2002, just as it began issuing licenses to foreign banks to enter the market. In addition, foreign banks may only establish one branch per year and are subject to high fees on the interbank lending market. China does not have to lift the requirement that a foreign bank's RMB lending not exceed 50 percent of its foreign-currency liabilities until December 11, 2006. This restriction presents a significant barrier to rapid expansion in the short term.

Not only will foreign banks remain subject to a tough regulatory environment even after the removal of specific restrictions directed at foreign institutions, they will also be competing on the same turf as domestic banks. Already, Chinese banks have won a number of large dollar-denominated loan business projects for foreign companies in China. Domestic banks have moved to improve their services with longer hours and friendlier staff, supported by a large number of branches. Foreign banks will not be in a position to win significant market share in the short term and will not necessarily engage in expensive branch expansion until staff and systems are in place.

Nevertheless, the market is growing. Total lending was up 11.6 percent and deposits grew 16.0 percent in 2001. China has been encouraging the growth of consumer spending and is pushing home mortgages and automobile financing to spur economic growth. Commercial loans to Chinese consumers for housing mortgages already exceed $50 billion, and auto loans have topped $8 billion. Consumer loans are also the least likely to default. Though only 5.7 percent of outstanding loans in China are consumer loans, consumer loans accounted for 20.5 percent of growth in new loans in 2001.

Early movers A number of the 30-odd foreign banks licensed since 1996 to offer limited RMB services in Shenzhen and Shanghai are moving to meet requirements to provide services in Tianjin and Dalian. Bank of East Asia, Citibank, HSBC, and Xiamen International Bank won licenses in early 2002 to launch foreign-currency lending services in specific cities. Foreign banks are also raising their direct investment in China's healthier small commercial banks: HSBC acquired an 8 percent stake in the Bank of Shanghai in December 2001, while in recent months the World Bank's International Finance Corp. upped its stake in the Bank of Shanghai to 7 percent and purchased a 15 percent stake in Nanjing City Commercial Bank. In total, the assets of foreign banks in China reached $45.1 billion at the end of 2001.

Insurance
China's WTO entry commitments in terms of transparency have already forced the China Insurance Regulatory Commission (CIRC) to abandon the game of keeping foreign applicants guessing about the timing of approvals and licensing. The Management Regulation on Foreign-Invested Insurance Companies, passed in late 2001, limits regulatory review of the two-stage application process to eight months. To submit applications, insurers must have at least $5 billion in global assets and have had a representative office in China for at least two years. Foreign insurers may not hold licenses for both life and nonlife operations.

The biggest stumbling block to the development of the mutual fund industry is the lack of adequate information on listed companies and the dearth of good investment targets.

The same rules require joint and wholly foreign-owned ventures to commit $24 million in registered capital (the amount subsidiaries must inject in operating capital depends on the number of branches), though CIRC may increase these amounts for new entrants at any time. CIRC also requires 20 percent of the capital injection to be placed into a guarantee fund at a CIRC-designated bank--a form of security deposit. A restriction requiring 20 percent of reinsurance to be directed to domestic reinsurers will be phased out by December 11, 2005, though the reinsurance of RMB premiums abroad will remain constrained by capital account controls.

China's WTO commitments allow foreign companies to establish nonlife insurance companies with 51 percent ownership as joint ventures or branches upon accession, and will allow wholly foreign-owned subsidiaries beginning December 11, 2003 (see Insurance In China: Pre- and Post-WTO). Life insurance companies will be held to 50 percent foreign ownership caps indefinitely. Geographic restrictions will be phased out by December 11, 2004, but some cities may open ahead of schedule. Foreign firms may now choose joint venture partners that have no previous financial industry experience. One complication under the new rules, however, is that foreign insurers must choose partners before the preliminary application phase--in the past, insurers could hold off on identifying partners until the second phase of application. CIRC has also issued rules to clarify the application process for agents, brokers, and appraisers. Revision to the PRC Insurance Law is expected this year.

Like their banking counterparts, China's domestic insurance companies have been struggling to make up for lost time through restructuring, creative partnerships, and launches of new services in this growing market. Insurance premiums in 2001 topped $25.4 billion, up 32 percent over 2000. China now boasts more than 50 domestic insurers, the best of which have begun to respond to market demand for professional, well-branded products.

Early movers China currently has more than 30 licensed life and nonlife foreign insurers, most of which are joint ventures or subsidiaries (see Table). American International Group, Inc. is leading the pack of foreign insurers with operations in Shanghai and in Foshan, Guangzhou, and Shenzhen, all in Guangdong. More recent entrants are launching operations and picking up domestic partners with cash or distribution outlets. New York Life International, Inc. has announced it will partner with appliance maker Haier Group Co., and Manulife Financial Corp. is working with Sinochem. The first batch of new insurers to be approved under the revised regulatory structure should start operations in early 2003.

Securities
China in 2001 instituted new requirements to improve reporting transparency and stem widespread market manipulation in its stock markets. Bringing regularity to China's domestic securities markets, which at the end of 2001 had 1,160 listed companies with a market capitalization of $525 billion, is a precondition to introducing additional players and advanced financial instruments. Developing the mechanisms and trust to support widespread individual investment by consumers and ultimately institutional investors is a primary goal for China's market regulators. Direct foreign participation in the market is crucial to this process, and foreigners are gradually being allowed to participate in investment banking and fund management businesses. Supporting services such as accounting and the provision of financial information are also opening.

China's markets are divided between foreign-currency-denominated B shares and RMB-denominated A shares; A shares account for most of the market's value and remain technically off-limits to foreign investors. China's markets also feature a mix of lock-up provisions for strategic investors that prevents quick profit-taking following initial public offerings (IPOs), and a closed capital account that prevents repatriation of RMB profits. But the fact that a significant portion of the almost $900 billion in RMB savings deposits held by Chinese citizens will gradually shift to securities investments has foreign companies hoping to set up shop as early as possible. Foreign-invested enterprise mutual funds will be able to accept RMB upon establishment and invest such funds, via domestic brokers, in A shares.

China's securities markets will also likely undergo a number of fundamental changes. Plans exist to merge the two stock exchanges in Shanghai and Shenzhen, and the launch of a new exchange for high-technology firms, postponed indefinitely in the post-dot-com environment, may resurface. China's central leadership also hopes to reintroduce mechanisms to reduce the level of state-owned shares in listed companies. B shares were opened to Chinese investors last year, and now schemes are being worked out to allow Chinese citizens to invest in Hong Kong stock markets under a variant of a qualified domestic institutional investor plan. China may also permit futures markets to expand again after years of tight controls.

Investment banks
China is accelerating WTO phase-ins of participation by foreign-owned securities companies (including investment banks). According to its WTO commitments, China must allow joint ventures with, at most, 33 percent foreign ownership to underwrite shares and broker foreign-currency B shares by December 11, 2004. But China approved several foreign entrants in early 2002, increasing equity levels and allowing A-share brokering. Investment banking services will be in demand as the pace of Chinese company listings picks up and foreign-invested enterprises in China receive long-awaited approval to issue A shares. An expected boom in mergers and acquisitions will further boost investment banking growth.

Regulators are likely to extend special privileges to a few desired entrants before the WTO commitment on securities companies takes effect. This window of opportunity exists because current Chinese law does not prevent the country from granting A-share trading licenses or approving higher foreign-equity ownership levels. China may grandfather the business scopes of such new investments when it subsequently introduces new laws to comply with WTO rules--as long as WTO commitments and Most Favored Nation principles are adhered to.

CSRC released a draft rule on securities companies, the Measures on Approval of Sino-Foreign Joint Venture Securities Companies, in late 2001. The draft echoed China's WTO commitments on equity limitations and business scope. The draft also set a minimum registered capital level of $60 million, again in line with regulatory commitments to limit entry to only the biggest, most committed players. CSRC has instituted the more general Rule on Management of Securities Companies, which, though authorizing the establishment of foreign-invested securities companies, refers to rules specific to foreign investors that have yet to be finalized. The rule nevertheless makes clear that foreign investors may either partner in a new joint venture or simply buy into existing securities companies.

Early movers Established in 1995 as a joint venture between China Construction Bank and Morgan Stanley, China International Capital Corp. (CICC) is China's highest-profile investment bank. CICC has reportedly received a coveted license to broker A shares.

Hong Kong-based Bank of China International Holdings (BOCI), the investment banking subsidiary of BOC, initiated a securities joint venture company in Shanghai in March 2002 with registered capital of $181 million. BOCI's joint venture is trailblazing in two respects: It is licensed to trade and invest in A shares, and it features a 49 percent sole foreign-equity stake.

BNP Paribas's 33 percent stake in a venture with Changjiang Securities, of Wuhan, Hubei, has also received approval. And CLSA is reportedly awaiting approval of a venture with Shanghai's Xiangcai Securities.

China needs foreign competition for precisely the reasons it fears it.

Fund management
Mutual funds in China have blossomed following regulators' decision to allow open-ended mutual funds again in 2000, after a failed initial start in the 1990s. Fourteen companies now offer 51 PRC funds (closed- and open-ended). Mutual funds are expected to expand rapidly as insurance companies, pension funds, and individual investor funds flow into securities. Foreign funds will likely find it relatively easy to operate in China with access to A shares through domestic brokers.

Foreign companies may now establish joint venture mutual fund operations with a foreign ownership cap of 33 percent. The cap will rise to 49 percent by December 11, 2004, according to China's WTO commitments. China has yet to finalize the Provisional Regulation on Establishment of Fund Management Companies by Overseas Institutions, released by CSRC in late 2001. The draft rule largely reflects the requirements in the 1997 Provisional Rule on Management of Securities Investment Funds, which requires that each fund investor contribute $36.2 million and operate funds with a minimum of $24.2 million. The much-anticipated Investment Fund Law is scheduled for a National People's Congress reading in mid-2002 and may take effect as early as 2003.

The biggest stumbling block to the development of the mutual fund industry is the lack of adequate information on listed companies and the dearth of good investment targets. A history of minimal shareholder supervision has led to widespread market-rigging, misappropriation of funds, and false reporting. Many traders still illegally trade on their customers' margins. China has instituted key reforms in the past year, including requirements for quarterly reporting, independent board directors, and information disclosure for insider trading and auditing. Though a 2001 order requiring listed companies to engage foreign auditing firms was rolled back because of pressure from domestic accounting firms, regulators recognize the shortfall in the number of Chinese certified public accountants and the need to professionalize the industry as quickly as possible.

Early movers Dozens of foreign investment funds struck technical cooperation deals with domestic funds as open-ended funds re-entered the market. Foreign companies will likely leverage these advisory roles into joint ventures in the near future. Early reports indicate that Schroder Investment Management (Hong Kong) Ltd. plans to form a joint venture with China Galaxy Securities Co. Ltd., and HSBC may further its partnership with China Southern Fund Management Co.

Auto financing
China committed to allow wholly foreign-owned investment in auto financing upon accession, but PRC regulators have been slow to write rules, aside from the foreign financial institution regulation, that will apply to nonbank financial services. Potential entrants hope that the nonbank rules will appear soon and will require less registered capital than banking operations. Auto finance companies hope to convince Chinese consumers, who collectively finance only about 5 percent of auto purchases, to move closer to the world average of 70 percent. Still, the same issues that affect banking--interest rate controls and the requirement to inject capital in advance of actual booked business--will hinder foreign investors' ability to lure market share away from domestic banks that have already launched auto financing services.

Credit cards
More than 380 million bank cards have been issued in China since 1985, but only a small percentage of these are true credit cards. Most consumers have debit cards that are linked directly to bank savings accounts. Moreover, bank cards only account for 1 percent of domestic consumption.

Clearly there is room for growth, though interest rate constraints and lack of mature credit verification and collection systems are stunting the industry's development. Poor standardization and cooperation among China's major banks also interfere. Dozens of bank card brands compete in the market, and ATMs of one bank rarely accept cards from a competitor bank. But the recent transformation of the decade-old "Golden Card" project (established to create a unified national payment system) into a commercial entity known as the China UnionPay Co. is real progress. UnionPay is now instituting a system whereby banks operating in China pay royalties to join the network and issue cards using the network's logo. Foreign credit card companies have been left out of the network process to date, in what is a clear attempt to keep the nation's banking network under domestic control.

China is opening its financial industry at a phenomenal pace. The regulatory reform and licensing of new business has put the financial sector in greater flux than any other sector. Of course, to many on the frontier, the pace of change seems glacial. And while many companies are rightly maddened by a lack of clarity or the imposition of new requirements in revised regulations, overall the changes are resoundingly positive.

Companies considering entering China's financial sector should heed both a note of caution and a call to action. First, the caution: despite China's commitment to fundamental liberalization, making money in the highly competitive, emerging financial services market will remain difficult. The RMB is unlikely to become convertible on the capital account in the near future, and interest rate controls will affect pricing decisions for some time to come. Domestic competition will not be easily swept aside, and low per capita incomes limit the revenue individual consumers can generate for financial service firms. Credit assessment also remains difficult. High entry costs must be weighed against a serious study of the actual potential market in the medium term--which is nowhere near the total population of 1.3 billion.

At the same time, China's progress should energize most multinational financial services companies. Many--but not all--financial companies have already opened a representative office on the mainland--a necessary first step for many licensing procedures in China investments. And having people on the ground to meet regulators, get a feel for the competition, develop a brand name, and start information flowing is indispensable, as is early staff development. Close monitoring of the quickly changing market and regulatory conditions is a prerequisite to making informed business development decisions.

Meanwhile, the changing market and regulatory structures outlined above evolve apace. New rules and requirements will undoubtedly follow the initial, groundbreaking rules revised or created to allow foreign participation. Yet a number of basic concerns remain about which WTO commitments China may accelerate, or when officials may raise registered capital requirements. And companies have yet to learn how foreign equity investment of less than 25 percent (the minimum level at which a company is considered a foreign-invested enterprise) will be treated in practice.

The reasons PRC regulators may seek to slow liberalization can be countered with the argument that foreign involvement will ease rather than exacerbate these problems. The development of a professional managerial culture with institutional motivations will strengthen stability. Corruption will be driven out of the market as investment funds flow to more responsible players. And regulators themselves will benefit from better financial information. Indeed, China needs foreign competition for precisely the reasons it fears it.

Taken in total, realistic exuberance is merited when viewing the burgeoning financial services market in China. Every financial service firm and its parent company will be looking at China in coming years. As in any sector, sober analysis of constraints and market potential will lay the foundation for a successful China strategy.

Key PRC Financial Regulations
Regulation	Date Effective	Link to Chinese Text
Financial Companies
Regulation on Management of Foreign-Invested Financial Institutions (State Council Order No. 340)	February 1, 2002	www.legaldaily.com.cn/gb/content/2002-01/07/content_30066.htm
Implementing Measures for the Regulation on Management of Foreign-Invested Financial Institutions (PBOC [2002] Order No. 1)	February 1, 2002	http://202.84.17.28/csnews/20020129/186343.asp
Provisional Regulations on Financial Asset Management Companies Involving Foreign Investment for Asset Restructuring and Handling (MOFTEC, PBOC, and MOF [2001] Order No. 6)	October 26, 2001	www.moftec.gov.cn/moftec_cn/wzs/flfg2001-1026.html
Interest Rates
PBOC Announcement on Unification of Management Policies for Domestic and Foreign-Invested Financial Institutions' Foreign Currency Deposit and Loan Interest Rates (PBOC [2002] Order No. 4)	March 1, 2002	www.pbc.gov.cn
Insurance
Administrative Regulations on Foreign Insurance Companies (State Council Order No. 336)	January 1, 2002	www.legaldaily.com.cn/gb/content/2001-12/25/content_29443.htm
Administrative Regulations on Insurance Appraisal Institutions (CIRC Order [2001] No. 3)	January 1, 2002	www.circ.gov.cn/policy/list_detail.asp?Auto_ID=141
Administrative Regulations on Insurance Agency Institutions (CIRC Order [2001] No. 4)	January 1, 2002	www.circ.gov.cn/policy/list_detail.asp?Auto_ID=146
Administrative Regulations on Insurance Brokerage Companies (CIRC Order [2001] No. 5)	January 1, 2002	www.circ.gov.cn/policy/list_detail.asp?Auto_ID=142
Regulation on Management of Insurance Companies (CIRC [2000] Order No. 2)	March 1, 2000	www.circ.gov.cn/policy/list_detail.asp?auto_id=140
Securities
Rule on Management of Securities Companies (CSRC Order [2001] No. 5)	March 1, 2002	www.csrc.gov.cn/CSRCSite/searchnews15.htm
Measures on Approval of Sino-Foreign Joint-Venture Securities Companies (Draft)	Draft released for public comment December 12, 2001	http://finance.sina.com.cn/y/20011212/153753.html
Provisional Regulation on Establishment of Fund Management Companies by Overseas Institutions (Draft)	Draft released for public comment December 21, 2001	www.cnstock.com/zxgg/zjhgg/200112211051.htm
Provisional Rule on Management of Securities Investment Funds	November 14, 1997	http://business.sohu.com/990920/file/019csc.html
Forthcoming New or Revised Regulations
Investment Fund Law, Insurance Law, Reinsurance Law, Social Security Law, Provisional Regulations on Futures Transactions, Regulation on Non-Bank Foreign Financial Institutions, Regulation on Management of Insurance Companies, Regulation on Mandatory Vehicle Insurance, Rule on Management of Insurance Company Information Reporting
NOTES: CIRC: China Insurance Regulatory Commission; CSRC: China Securities Regulatory Commission; MOF: Ministry of Finance; MOFTEC: Ministry of Foreign Trade and Economic Cooperation; PBOC: People's Bank of China. English translations are available to US-China Business Council member companies on the Council website at www.uschina.org/members