China’s financial sector has been exploding over the last five years and can continue to expect much faster growth than that of the national economy in the foreseeable future, according to both Chinese and Western analysts. During the 10th Five-year Plan (2001-2005) period, China’s gross domestic product (GDP) posted an annual growth of 8.8 percent, while insurance sector saw an annual growth rate of 35 percent, exceeding financial sector’s 15.8 percent.

China’s per capita life insurance premiums amounted to 30.5 U.S. dollars last year, compared with the international average of 299.5 U.S. dollars, while the property insurance premium was 15.8 U.S. dollars, compared with the international average of 219 U.S. dollars. While the pricing structure may seem primitive at a glance, the product is not. Nor is the growth curve, which speaks to just how rapidly the Chinese version of capitalism is generating a vibrant economy.

Under the 11th Five-year Plan, China’s insurance revenue is expected to exceed one trillion yen (125 billion U.S. dollars) by the end of 2010, and insurance assets are expected to hit five trillion yen. “This may indicate that China’s insurance sector may enter a fast growth period, with a growth rate of more than 15 percent per year in the next five years,” according to a senior Chinese financial analyst.

The growing population, rising middle class and tax breaks would also contribute to the fast development, Huang said. Last year, 40.2 percent of China’s population was aged from 25 to 49, the group with the strongest purchasing power, while the 15 to 24-year-old group accounted for 16.5 percent of the population. The age distribution in China is going to guarantee continued growth of a young, increasingly educated and materially oriented populace.