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Since China's entry into the World Trade Organization, the Chinese Insurance Industry has opened up; various issues have emerged, including with respect to the regulatory framework, structuring options, recent regulatory developments, lack of internal managerial skills, disordered and increased competition. Due to the fact that Chinese State Owned Enterprises (SOE's) insurance companies were not managed very well, the Chinese government has adopted firm reforms to transform SOE's into private companies and increase competition. However, these Chinese Life Insurance companies have also benefited from a series of other reforms that have taken place in both the political and economic fields thereby opening up the country gradually to the outside world. Great emphasis has been placed on encouraging and attracting foreign investment by building up a more stable investment environment. In order to achieve their strategic goals, foreign insurers adopt different methods for entry to the marketplace. The three major entry strategies are Joint Venture, Wholly Owned Foreign Enterprise and Merger. Each method has advantages and disadvantages. This paper will focus on exploring in detail merger entry strategies for foreign companies entering the Chinese Life Insurance Industry (CLII).
