The astonishing emergence of China as a world economic power has been a complex affair, with the traditional market forces being managed by a central government that is at once agile and still a visible remnant of the hard-core Maoist centralized economy.

The insurance industry is a prime example of the speed with which China’s managed economy has harnessed the best of capitalism. In the five years that China has been a member of the World Trade Organization, its insurance industry has both blossomed as a domestic product and been opened to international investment. Recently, the Chinese Insurance Regulatory Commission announced a plan to allow foreign firms to invest as much as 50% in existing Chinese insurance companies.

The old 5 Year Plans of the post-war Mao era now look like corporate growth charts. According to the People’s Daily Online (That’ll shake up some old lefties) 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.

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 in the next five years,” said Huang Huamin, an analyst with CITIC Securities Co. Huang also recognized that the premier driving force in this industry is the rapidly developing Chinese middle class.