SHANGHAI, Dec 3: European insurance companies believe they will be able to compete on an equal footing with other foreign insurance companies after China’s entry into the World Trade Organisation, EU Trade Commissioner Pascal Lamy said on Monday.

Lamy, who is on an official visit to China at the invitation of Minister of foreign trade and economic cooperation Shi Guangsheng, declined to say whether China’s position on the so-called grandfathering provision had changed during the negotiations to finalise the country’s WTO entry.

The provision was negotiated between the US and China in 1999 and was intended to ensure that US insurer American International Group would maintain its right to set up wholly-owned branches in China.

This has been a huge bone of contention for European insurers entering China who could have so only in joint ventures with local firms.

However, Lamy said that as a result of the WTO negotiations, it’s an agreed position that from now on we compete on an equal footing, and I’m fine with that.

If there are implementation problems here and there, we will behave in the ways I have outlined and sketched, which is, let’s try and understand, and if disagreement persists we have a litigation system which is there, he said, adding that litigation is not the EU’s “preferred option”.

But I’m perfectly confident that the deal we have will be implemented on the Chinese side.

He said the negotiations on this issue were difficult, but agreements which were difficult to reach often held up better than those reached easily.

Industry regulator the China Insurance Regulatory Commission (CIRC) said last month non-life insurers from abroad would be allowed to set up branches or joint ventures in China immediately after WTO entry, the China Daily said.

They would be able to hold as much as 51-per cent stakes in joint ventures, and two years after WTO entry, foreign non-life insurance firms could set up wholly foreign-owned subsidiaries in China.—AFP