C.V. Starr & Co Inc has a long history in China. How did the company grow in China under your tenure?

We have very few complaints about doing business in China. We've been there for a long time. I first went to China in 1975. It took until 1992 to get a license. It's a long time. But we were patient. We were doing business in 130 countries, so we understood how to do business in different countries. I think we brought a lot of knowledge to China in things that we do.

I'm never very patient. But I knew that one day, China would have to open up. A country with 1.3 billion people could not be left out of the world's trading system and be isolated. It was only a matter of when, not if.

What is your long-term goal in China?

To grow, and continue to do things that benefit us and benefit China. If we're creative and introduce new products, then we can help Chinese companies that want to invest outside of China. We can either help them in investing or we can help them by providing insurance coverage for their investments outside of China.

How has the Chinese insurance industry changed?

Automobile insurance is relatively new in China. Automobiles are relatively new. The roads are very crowded. The drivers are not that experienced, so there are more losses than say in five or 10 years from now. Also, the expense ratio is very high compared to the US. That too will have to change. You have to become more efficient. I don't say this critically; I say this is a reality of the market today. The large insurance companies in China－PICC, Ping An and others－are very happy with the results. If they were unhappy, they would change.

There are other classes of insurance business, very important classes of business－construction, complicated property and casualty risks. There are a lot of things to learn. You don't learn it by yourself, except through bitter experience. You have to know what you're doing. The insurance industry can learn, and they have to learn and they will learn. It'll take time, but they'll learn.

What are the challenges facing the Chinese economy?

China has to continue to redirect its economic policies. Only about 30 percent of the economy is consumer-driven. It's about 70 percent consumer-driven in the US. If China gets the consumer part of it going faster, it will grow much faster. It'll benefit the people, it'll benefit the economy. I think it will happen. It will happen over time. You can't rely only on the State-owned enterprises for growth. They're not the most efficient, so it's got to come from the consumer side.

How do you see the role of banks in China?

You have to have banks that are consumer-driven, that can help small, medium-sized companies have access to capital and loans. As they grow, they hire more people. The more they hire people, the more they become consumers and start buying more things. It's like a rolling stone; It gets going, faster and faster.

What do you think the US should do with China in terms of a trade agreement?

I advocated and publically stated that we need a free trade agreement with China. The US and China should have a free trade agreement. It may take 10 years to negotiate, but so what? It took us 10 years to negotiate with South Korea for a free trade agreement. It took China 10 years to have a free trade agreement with Australia. We should begin discussing that. As for China being a part of the Trans-Pacific Partnership, the big issue is the State-owned enterprises.

Are you optimistic about the US-China business relationship?

I'm optimistic because I think a country as large as China will continue to change. Since I've been going to China, I've seen many changes, for the good. When I first went to China, it was not the second-largest economy in the world. It is now. And if China does what I said－becomes a more consumer-driven economy, it will be the largest economy in the world. Of course, you have to have patience.