China's insurance companies are optimistic about the prospects of surviving and prospering in international competition after the country enters the World Trade Organization (WTO).

Chairman of the China Insurance Regulatory Commission Ma Yongwei made this remark today at a press conference held by the Information Office under the State Council.

He pointed out that it is totally unnecessary to worry that foreign insurance companies will dominate the Chinese market.

A groundbreaking agreement signed by China and the United States on Monday is seen as having paved the way for China's accession to the WTO.

According to the agreement, China will allow wider market access to foreign insurers after the country joins the WTO.

Ma noted that China's accession must be on the basis of a balance between obligations and rights. Opening the insurance market to foreign companies will help China introduce prudence, competition, and advanced service skills into its insurance industry.

On the other hand, the presence of foreign insurers in China will greatly increase the competition for Chinese insurance companies, forcing them to improve service quality, strengthen self-regulation, enhance personnel training, and contribute to perfecting the relevant legal framework.

"We have to confess that in terms of quality of service and business skills, the Chinese insurance sector lags far behind its foreign counterparts. However, we will reach the most advanced level in the world in the near future if we work hard from now on, " he said. "It won't take as long as 10 to 15 years."

In response to one question, Ma said that China will not relinquish its authority over licensing foreign insurance companies operating in the country after it enters the WTO. Over the next five years, the Chinese government will set no limits on the number of foreign insurers it will allow into the country each year. Instead, it will approve the entry of all companies that meet scrutiny standards under the principle of prudence and according to relevant law and regulations.

China will gradually accelerate the pace of opening its insurance market over a period of time, Ma said, noting that both foreign insurers and re-insurers will be allowed into the country with their locations, operational scope, and organizational forms expanded from time to time.

Life insurance companies are allowed to enter China in the form of joint ventures and can own a maximum share of 50 percent of the joint venture, Ma said.

The Chinese government will gradually allow foreign life insurance companies to expand their scope of operations to wider areas from the current area limited to services for individuals only.

Ma said that foreign property insurance company will probably be allowed to set up solely owned subsidiaries in China soon.

He also said that foreign insurance companies will be allowed to set up branches in places other than Shanghai and Guangzhou.

Chinese insurers will focus on fostering sophisticated personnel and upgrading the technological level of services in a bid to compete with foreign companies, Ma said.