American International Group sees China becoming a much larger part of its general insurance business within the next five years, Nicholas Walsh, executive vice-president of the foreign general insurance division, said Wednesday.

Walsh, a 35-year veteran of the giant insurance company, said he expects a rapid ramp-up of AIG’s business in the world’s most populous country once some key regulatory approvals are in hand in the next year or so.

“Just by following the Chinese economy, I think there is enormous opportunity for anyone who has products to sell,” said Walsh, speaking to investors at an insurance conference held by investment firm Keefe, Bruyette & Woods in New York.

“Once we are established, there is a relative degree of opportunity there, but it has just been that process of applying and receiving approval,” he added. “China will be a much bigger component towards the end of a 5-year period.”

AIG, founded in Shanghai 89 years ago, already does a bustling business in life insurance there.

Among the biggest areas of opportunity for the foreign general unit in China, Walsh listed accident and health coverage, export liability and marine insurance.

He was more cautious about prospects in the property market there, however.

“Trying to compete face to face with the big domestic companies on property is not something we are focusing on right now,” said Walsh. “The local companies have very large capacity, and are writing business at prices that we don’t yet understand.”

During 2007, the foreign general insurance group, which is made up of AIG’s general insurance business outside the U.S. and Canada, accounted for roughly a third of AIG’s total general insurance policy sales. The unit employs about 19,500, Walsh said.