A senior official from China’s banking and insurance regulator says that the country’s opening of its finance sector will entail reciprocal measures on the part of other economies.
“Our country’s opening must be based on the principle of equality and mutual benefit,” said Chen Wenhui, vice-chair of the China Banking and Insurance Regulatory Commission, at a forum over the weekend.
“For countries and regions that are afraid of opening and implement protectionism, their long term competitiveness will definitely suffer as they only look at short-term gains.”
Senior political leaders, including President Xi Jinping and central bank governor Yi Gang, stressed China’s commitment to further opening of the country’s financial sector and broader economy at the 2018 Bo’ao Forum for Asia in early April.
China has since lifted restrictions on foreign ownership of key financial institutions, allowing them to obtain controlling stakes in securities companies.
According to Chen the opening of China’s finance sector will help to boost the economy and improve resource allocation, as well as prompt other countries to open up to Chinese financial institutions.
“Promoting the opening of China’s financial industry to the outside world and further improving the fairness and transparency of the domestic financial market will help create a more favourable policy environment for the overseas development of financial institutions.”
Chen pointed out that some countries had barred the expansion of Chinese financial institutions because their own banks had been subject to business restrictions in China.
The CBIRC official decried a decline in the market share of foreign banks to 1.32% of total Chinese banking sector assets as of the end of 2017, from a peak of 2.5%.
“The market share has been falling recently, which is not a good thing,” said Chen.
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