The U.S. House of Representative's approval of permanent normal trading privileges for China late last month places U.S. fund and insurance companies one step closer to competing in a market that could develop into one of the largest in the world, said executives and analysts in the fund and insurance industries.

The upgrade in trading privileges was crucial for U.S. financial service companies because it will allow them to compete with non-U.S. firms for China's markets that are opening to foreign firms as part of China's entrance into the World Trade Organization.

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