China yesterday laid out a clearer timetable for opening its financial sector to more foreign investment by the end of this year.
Though the specific details offered were mostly incremental and repeated previous pledges, China for the first time said it would implement a number of the measures by the end of this year, with some steps promised to be put in place as early as June, reports Reuters.
China will raise foreign ownership limits to 51% in life insurance, securities, fund management, and futures companies “over the next few months”, the People's Bank of China (PBOC) said in a statement on its website.
The gradual removal of those ownership limits was first announced last November, when an official said the move would take effect immediately following the drafting of related rules, without specifying a timeline. In November, China also said it would lift the limit to 51% in three years and fully remove them after five years. The government will also remove a requirement that foreign insurers must have a representative office in China for two years before they can set up a company, further easing foreign access to the insurance sector.
The opening up also allows foreign firms to invest in trust companies, financial leasing, auto finance and consumer finance, plans that were announced last year.
PBOC Governor Yi Gang said in a panel discussion at the Boao Forum for Asia held this week that China will allow foreign firms to compete on an equal footing with domestic companies in the sector.
The PBOC also confirmed it wants to set up a planned trading link between its stock markets and London by end-2018.
China’s official pledges, reiterating previous promises from Beijing to open the financial sector, come at a time of heightened pressure on China from the US over trade and access to its markets.
“The greater detail on the timing of implementation may indicate China’s desire to avoid an escalation in trade restrictions and to boost market confidence that the announced measures to open up the market will be adopted in practice,” Moody’s Investors Service said in a note yesterday.
On Tuesday, Chinese President Xi Jinping pledged at the Boao Forum that plans are under way to accelerate access to the insurance sector, expand the permitted business scope for foreign financial institutions and reduce tariffs on imported automobiles and ownership limits for foreign car companies.