This article examines patterns of changes in state-owned capital and private capital in Chinese insurance industry over a fifteen-year period, 1995 to 2009, to assess whether the boundaries of the state as a participant in insurance industry have significantly declined. The conclusion is that privatization in insurance industry presents different characteristics from other fields in which the state-owned economy shrinks and the private economy expands. Currently, state-owned capital still hold dominant position in Chinese insurance market and privatization in a significant way has not taken place. Nevertheless, the numbers of private insurance companies in China have increased and the volume of private equity capital has risen substantially, both in absolute volume terms as well as in investment per company. This trend has been pronounced in the post-2003 period, after reforms were introduced in China. Therefore, the private capital which is seeking short-term profits may result in the frequent changes of ownership in insurance companies.
