International financial giant Citigroup Inc. has started competition on China's insurance market by first establishing a joint venture in the sector.

A source with the group's China headquarters said the Travelers Insurance Company of the group and the Shanghai Alliance Investment Ltd. would set up a joint life insurance company in Shanghai.

The two sides will each hold 50 percent of the total shares of the joint venture, which has been approved by the China Insurance Regulatory Commission and is expected to go into operation in early 2005.

The name of the joint venture has not been disclosed.

A country of 1.3 billion people and with fast economic growth, China has attracted the attention of an increasing number of foreign insurance companies in the past few years. Among those foreign insurance companies which have invested in China are the American International Group, AXA of France and Allianz of Germany.

Official statistics show that China's premium income has grown by 29 percent annually on average in the past decade. The premium income for last year reached 388 billion yuan (46.9 billion US dollars). The ratio of premium income to the national gross domestic product was 3.33 percent.

Source: Xinhua