China To Open Up Financial Services To Foreign Firms
by Mary Swire, Lowtax.net, Hong Kong
13 April, 2018
The People's Bank of China has committed to putting forward measures to significantly open China's financial services industry to foreign competition, following an announced commitment to do so from President Xi Jinping.
Changes to be implemented in the next few months include the removal of the foreign ownership cap for banks and asset management companies, treating domestic and foreign capital equally, and allowing foreign banks to set up branches and subsidiaries at the same time.
The foreign ownership cap will be lifted to 51 percent for securities companies, fund managers, futures companies, and life insurers, with the cap to be removed in three years.
Joint-funded securities companies will no longer be required to have at least one local securities company as a shareholder.
The daily stock quota applying to cross-border trades between the Hong Kong and mainland stock markets will be increased from CNY13bn (USD2bn) to CNY52bn for Shanghai-bound and Shenzhen-bound investment, while Hong Kong-bound investment will be allowed to rise from CNY10.5bn to CNY42bn. This measure starts May 1, 2018.
Eligible foreign investors will be allowed to provide insurance agent and loss adjuster services in China, and restrictions on the business scope of foreign-invested insurance brokerage companies will be lifted, treating them in the same way as local companies.
The People's Bank also announced preparatory work on a "Shanghai-London Stock Connect" initiative, which will the link stock markets in London and Shanghai.
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