China’s national pension insurer introduces foreign investor as financial opening-up picks up speed

Chinese national pension insurer Guomin Pension & Insurance Co said on Monday that German investment firm Allianz Global Investors GmbH will become a strategic investor. Analysts said that foreign financial institutions and patient capital continue to hike investment in China's pension finance market, indicating their confidence in the country's long-term economic growth and enormous business opportunities brought about by China's financial opening-up.

According to a statement on the website of Guomin Pension & Insurance Co, Allianz Global Investors plans to spend about 284 million yuan ($39.12 million) to buy a total of 228 million shares of the insurer. After the deal, Allianz Global Investors will have a 2 percent stake in the insurance firm.

The deal needs to be approved by the National Financial Regulatory Administration (NFRA), it said.

Guomin Pension &Insurance Co, jointly launched by China's largest banks and insurers in 2022, said its in-depth cooperation with Allianz Global Investors will bring an international perspective and professional experience, helping the company enrich product and service supplies in the third pillar of China's pension system and better meet the public's demand for pension security and wealth management.

"Allianz Global Investors is committed to growth in China, we are dedicated to exploring suitable business opportunities and partnerships in this important market," the company told the Global Times on Monday.

China's pension finance now has been in a strategic opportunity, since the Central Financial Work Conference held in Beijing in October made pension finance one of the focuses in the country's development into a financial powerhouse.

The German financial firm's investment in a newly established professional pension insurance firm in China sends a signal that foreign financial institutions and patient capital continue to increase their investment in China's pension finance sector, and they are showing their confidence in China's long-term growth potential, Liu Guohong, director of the Department of Finance and Modern Industries at China Development Institute in Shenzhen, told the Global Times on Monday.

Zhao Qingming, a Beijing-based veteran financial analyst, told the Global Times on Monday that China's financial opening-up has made remarkable achievements in recent years, with the number of foreign-funded firms posting a fast increase and foreign investment in China's financial markets reporting notable growth.

The sound cooperation and competition have also enhanced Chinese local financial institutions' capacity in serving the real economy and meeting consumers' diversified demand, Zhao said.

In 2024, foreign financial institutions have continued to expand their investment in China. HSBC recently said that it completed the acquisition of Citi's retail wealth management business in the Chinese mainland, while a couple of foreign financial institutions -- Fidelity Investment Group and Alliance Bernstein -- moved to increase the registered capital of their Chinese subsidiaries.

Over recent years, the country has rolled out more than 50 measures to expand financial opening-up, including scrapping foreign ownership caps in the banking and insurance sectors, and slashing access thresholds for foreign investors, according to NFRA.

As of January, 24 foreign Global Systemically Important Banks had established institutions in China and nearly half of the world's top 40 insurance companies had entered the Chinese market, data from the NFRA showed.

Opening-up is an important driving force for the reform and development of China's financial industry, and China sincerely welcomes more foreign institutions and long-term capital to come to China to do business, Li Yunze, head of the NFRA, said at the annual Lujiazui Forum held in Shanghai last week.

"We will steadily boost institutional opening-up, relax the scope of foreign shareholders in non-bank financial institutions in China, and encourage qualified foreign-funded institutions to participate in business pilot programs in order to support foreign-funded institutions to explore the China market and conduct stable operations," Li said.

With China's steady economic growth, the country remains a popular destination for foreign investment, especially in technology innovation, the energy transition, the pharmaceutical sector and consumer goods, Ginger Cheng, CEO of DBS China, told the Global Times in a recent interview.

China's GDP growth of 5.3 percent year-on-year in the first quarter comfortably topped forecasts. Domestic demand has been strengthening, with consumer spending and investment both picking up. This provides an important driving force for continued economic expansion, Cheng said.

In March, the State Council, the country's cabinet, issued an action plan to steadily promote high-level opening-up and make greater efforts to attract and utilize foreign investment. It said that efforts will be made to expand the access of foreign financial institutions in the banking and insurance sectors, and expand the business scope of foreign financial institutions participating in the domestic bond market.

"China is expected to roll out more financial opening-up measures," Liu said, noting that the country should continue to boost institutional opening-up and align its financial rules and governance with international standards to attract more foreign financial institutions.

The authorities should enhance financial governance capability to match the opening-up level, Zhao said, noting that efforts are needed to step up supervision and evaluation of cross-border financial risks and safeguard national financial stability and safety.