Page 168 - 2017 White Paper
P. 168
7 White Paper on the Business Environment in China
of these projects was generally similar to in years past, Southwestern University of Finance and Economics
although the nation’s central region attracted a greater Professor Lin Yi told China Daily that 200 million in-
share than it had in 2008 (consistent with, or perhaps dividuals were participating in the program. It is expected
a result of, the Central Government’s efforts to drive to cover the entire nation by 2020 (Xinhua 2011b).
investments inland) (Invest in China 2010).
In addition to the subsidies and the new pension
According to a “Regular Press Conference of the program, improvements have been made to rural health
Ministry of Commerce” held in 2010, the number of insurance under the “New Rural Cooperative Medical
newly established foreign enterprises in the agriculture, Scheme”. The program, which reportedly covered 93
forestry, animal husbandry and fishery industries was percent of the Mainland’s farmers in 2010, under which
929, up by 3.7 percent year-on-year, and the actual “the government will raise its subsidy to 200 yuan per
utilization of foreign capital amounted to US$1.91 billion, person each year from 120 yuan in 2011 [while the
up by 33.8 percent year-on-year. These new enterprises individual] pays 30 yuan”. The program will furthermore
accounted for 3.4 percent of the national total of newly- increase reimbursement rates for “basic and essential”
established foreign-invested enterprises and 1.8 percent drugs and services from 60 to 70 percent and raise the
of total paid-in foreign capital, respectively (Ministry of maximum reimbursement amount from 30,000 to 50,000
Commerce People’s Republic of China 2011). yuan (Xinhua 2011c).
FDI in the agricultural industries has historically 2010 saw an additional insurance scheme initiated: a
focused on technical cooperation with local producers; weather insurance pilot program in Fujian was announced
the proportion of foreign investment with an export after a China Insurance Regulatory Commission (CIRC)
focus is quite small (Ministry of Commerce People report detailed a systemic inability to adequately
Republic of China 2011). The trend in agricultural FDI is compensate for losses due to natural disasters: “Insurers
perceived to be upward, however: overcapacity in the cover about 30 percent of losses from natural disasters in
manufacturing sector will likely drive more FDI to the developed countries, but that figure is below 5 percent
agricultural and service sectors, Asian Development Bank in China — a country that is frequently hit by a wide
senior economist Zhuang Jian told China Daily in 2009 (Si range of natural disasters” (Hu 2010). A 2010 CIRC report
2009). In 2011, China Daily specified that the resources indicated that agricultural insurance premiums over the
of foreign investment will be allocated to advanced course of 2009 totaled 13.39 billion yuan in 2009 (Huang
agriculture (Chang 2011). 2010).
Finally, although the Ministry of Agriculture published Despite its fast expansion following that original
statistics indicating a 13.2 percent year-on-year growth in pilot program, agricultural insurance is still somewhat
agricultural exports between 2002 and 2010, the Chinese under-regulated and potentially problematic. According
Academy of Social Sciences is predicting that the import to an unnamed State Council official speaking to China
and export of China’s agricultural products will likely slow Daily, issues include “a lack of continued policy supports
in the medium-to long term (Xinhua 2011a). and unclear responsibilities for relevant departments”.
Accordingly, the State Council’s Legislative Office issued
Agricultural Insurance a draft proposal for agricultural insurance regulations
in May of 2012. The draft details how the government
Another recent development is the proliferation of “will support agricultural insurance with favorable
agricultural insurance. After a pilot program involving financing and taxation policies and will specify the duties
six provincial regions, it was reported that “agricultural of relevant departments”, in addition to outlining “the
insurance income reached 10.54 billion yuan by principles for insurance companies handling agricultural
November [of 2008], soaring 112 percent compared with insurance and the rules for operations in accordance
the same period [in 2007],” and that a total of 4.2 billion with risk analyses, business actions and business results”
yuan in compensation had been paid out to more than 10 (China Daily 2012c).
million households as a result (Xinhua 2008).
Additionally, a pilot pension program was launched
in 10 percent of the nation’s counties in 2009. By 2011,
168
of these projects was generally similar to in years past, Southwestern University of Finance and Economics
although the nation’s central region attracted a greater Professor Lin Yi told China Daily that 200 million in-
share than it had in 2008 (consistent with, or perhaps dividuals were participating in the program. It is expected
a result of, the Central Government’s efforts to drive to cover the entire nation by 2020 (Xinhua 2011b).
investments inland) (Invest in China 2010).
In addition to the subsidies and the new pension
According to a “Regular Press Conference of the program, improvements have been made to rural health
Ministry of Commerce” held in 2010, the number of insurance under the “New Rural Cooperative Medical
newly established foreign enterprises in the agriculture, Scheme”. The program, which reportedly covered 93
forestry, animal husbandry and fishery industries was percent of the Mainland’s farmers in 2010, under which
929, up by 3.7 percent year-on-year, and the actual “the government will raise its subsidy to 200 yuan per
utilization of foreign capital amounted to US$1.91 billion, person each year from 120 yuan in 2011 [while the
up by 33.8 percent year-on-year. These new enterprises individual] pays 30 yuan”. The program will furthermore
accounted for 3.4 percent of the national total of newly- increase reimbursement rates for “basic and essential”
established foreign-invested enterprises and 1.8 percent drugs and services from 60 to 70 percent and raise the
of total paid-in foreign capital, respectively (Ministry of maximum reimbursement amount from 30,000 to 50,000
Commerce People’s Republic of China 2011). yuan (Xinhua 2011c).
FDI in the agricultural industries has historically 2010 saw an additional insurance scheme initiated: a
focused on technical cooperation with local producers; weather insurance pilot program in Fujian was announced
the proportion of foreign investment with an export after a China Insurance Regulatory Commission (CIRC)
focus is quite small (Ministry of Commerce People report detailed a systemic inability to adequately
Republic of China 2011). The trend in agricultural FDI is compensate for losses due to natural disasters: “Insurers
perceived to be upward, however: overcapacity in the cover about 30 percent of losses from natural disasters in
manufacturing sector will likely drive more FDI to the developed countries, but that figure is below 5 percent
agricultural and service sectors, Asian Development Bank in China — a country that is frequently hit by a wide
senior economist Zhuang Jian told China Daily in 2009 (Si range of natural disasters” (Hu 2010). A 2010 CIRC report
2009). In 2011, China Daily specified that the resources indicated that agricultural insurance premiums over the
of foreign investment will be allocated to advanced course of 2009 totaled 13.39 billion yuan in 2009 (Huang
agriculture (Chang 2011). 2010).
Finally, although the Ministry of Agriculture published Despite its fast expansion following that original
statistics indicating a 13.2 percent year-on-year growth in pilot program, agricultural insurance is still somewhat
agricultural exports between 2002 and 2010, the Chinese under-regulated and potentially problematic. According
Academy of Social Sciences is predicting that the import to an unnamed State Council official speaking to China
and export of China’s agricultural products will likely slow Daily, issues include “a lack of continued policy supports
in the medium-to long term (Xinhua 2011a). and unclear responsibilities for relevant departments”.
Accordingly, the State Council’s Legislative Office issued
Agricultural Insurance a draft proposal for agricultural insurance regulations
in May of 2012. The draft details how the government
Another recent development is the proliferation of “will support agricultural insurance with favorable
agricultural insurance. After a pilot program involving financing and taxation policies and will specify the duties
six provincial regions, it was reported that “agricultural of relevant departments”, in addition to outlining “the
insurance income reached 10.54 billion yuan by principles for insurance companies handling agricultural
November [of 2008], soaring 112 percent compared with insurance and the rules for operations in accordance
the same period [in 2007],” and that a total of 4.2 billion with risk analyses, business actions and business results”
yuan in compensation had been paid out to more than 10 (China Daily 2012c).
million households as a result (Xinhua 2008).
Additionally, a pilot pension program was launched
in 10 percent of the nation’s counties in 2009. By 2011,
168
