American International Group, founded in Shanghai but now centred in New York, is providing a stumbling block to China’s entry into the World Trade Organisation.

Unlike any of its Western competitors in the China insurance business, AIG has been allowed into the country while retaining 100% ownership and control. All other foreign insurers are required to find a Chinese joint venture partner.

Now the European Union is lining up against the US at talks in Geneva aimed to resolve any outstanding issues to bring China into the WTO. The Europeans are demanding that AIG should operate under the same deal as they do.

But legendary AIG Chairman Hank Greenberg has mustered support in Washington, and US negotiators in Geneva are stonewalling the European demands. Mr Greenberg remains adamant he will open new branches in China under the same 100% ownership, and has “every confidence” President Bush will continue to support AIG.