Regulators have approved China's first pension insurance company run by a foreign insurer, a move that analysts predict more foreign financial companies would follow as China continues to open up its financial markets. 

Illustration: VCG

Heng An Standard Life Insurance, a Chinese-British joint venture with 50-50 ownership, has been approved to set up the country's first foreign-invested pension insurance company, the China Banking and Insurance Regulatory Commission (CBIRC) announced in a statement on its website on Wednesday. 

Heng An Standard Life Insurance's pension insurance company will be the ninth pension insurance entity in China, financial news website cnstock.com reported on Thursday.

Heng An Standard Life Insurance's application was the first case in the insurance industry since China's legislature passed a new foreign investment law this month, domestic news site Beijing Business Today reported on March 21. 

China raised the ceiling for the proportion of foreign ownership in the insurance industry to 51 percent, and will remove the restriction after three years, according to a statement published by the CBIRC on April 27, 2018. 

The CBIRC also approved two applications from foreign insurers for greater market access and expansion of their business scope. In 2018, seven applications for foreign-funded banks and insurance institutions were approved.

The CBIRC will continue to push for the opening-up of the banking and insurance sectors and allow more qualified foreign-invested banks and insurers to participate in China's financial markets, said the statement.

Li Daokui, a former advisor to China's central bank, said that insurance, commercial banking, fund management and the payment sector, where opening-up has been slow, will be key areas in the next phase, the Economic Information Daily reported on Thursday. 

China's pension insurance business is an undeveloped industry, and new operating models and concepts of foreign companies should be introduced to promote the development of the industry, said Dong Dengxin, director of the Financial Securities Institute at the Wuhan University of Science and Technology.

The industry has promising prospects. The introduction of foreign companies will promote competition and innovation, as well as generate more products to meet the rising demand for pension investment management in China, Dong added.