Testifying before the U.S. House of Representatives Committee on Banking and Financial Services, Norman Sorenson, president of Principal Financial's international division, called for an upgrade in China's trade status so the U.S. financial services industry can tap China's pension and retirement markets.
"If Congress fails to grant permanent normal trading relations to China and China enters the World Trade Organization, American financial services companies will be effectively barred from the China market," Sorenson said. "With PNTR, U.S. insurers and other financial services firms will be able to enter and expand in China on terms equal with our international competitors."
Principal Financial, of Des Moines, Iowa, has had a representative office in Beijing since 1994 and is well positioned to enter the Chinese pension market, Sorenson said.
U.S. financial firms would directly benefit by an upgrade in China's trade status, he said.
"(The) American Council of Life Insurers estimates that opening the Chinese insurance market to American companies will lead to significant increases in insurance and pension premiums for U.S. providers, exceeding 300 percent," he said.
Principal Financial is the largest provider of 401(k) plans in the U.S., providing plans to nearly 45,000 sponsors and 3 million participants, said Susan Houser, a spokesperson for the company.
Princor Financial Services, Principal's mutual fund division, offers 18 funds and has $6 billion in assets under management.