CBIRC Unveils 12 New Measures for Opening of Chinese Banking and Insurance Sectors

The head of the China Banking and Insurance Regulatory Commission (CBIRC) has unveiled plans to launch a dozen new measures to open up the Chinese financial sector.

Guo Shuqing (郭树清), CBIRC chair and party secretary of the Chinese central bank, said to Xinhua that the 12 measures would include:

1. The simultaneous cancellation on ceilings on holdings of equity by a single Chinese-invested or a single foreign-invested bank in a Chinese commercial bank, in accordance with the principle that domestic and foreign investors are treated consistently;
2. The cancellation of the USD$10 billion total assets requirement for foreign banks establishing foreign invested legal person banks in China, and the $20 billion total assets requirement for foreign banks establishing branches in China;
3. The cancellation of the $1 billion total assets requirement for offshore financial institutions investing in the equity of trust companies;
4. Allowing offshore financial institutions to invest in the equity of foreign-invested insurers in China;
5. The cancellation of the requirement that insurance brokers engaging in insurance brokerage operations in China have been in operation for at least 30 years, and have total assets of no less than $200 million;
6. Loosening of restrictions on Chinese shareholders in Sino-foreign joint-venture banks, and the cancellation of the requirement that the sole or primary Chinese shareholder be a financial institution;
7. Encouraging and supporting foreign financial institutions to engage in equity, operational and technical cooperation with privately controlled banking sector and insurance sector institutions;
8. Allowing foreign insurance group companies to invest in the establishment of insurance institutions;
9. Allowing foreign-invested insurance group companies in China to establish insurance institutions with reference to the qualification requirements for Chinese-invested insurance group companies;
10. The simultaneous loosening of entry policies for Chinese-invested and foreign-invested financial institutions to invest in and establish consumer finance companies, in accordance with the principle that domestic and foreign investors are treated consistently;
11. The cancellation of examinations and approvals for foreign-invested banks to handle renminbi operations, and allowing foreign-invested banks to engage in renminbi operations when they do business;
12. Allowing foreign-invested banks to engage in agency collection and payments operations.

Guo said that further opening of the banking and insurance sector is necessary for the independent growth of the Chinese economy and finance, and will be of benefit to enriching market actors, stimulating market vitality, and improving the management level and competitive capability of the financial sector.

Financial regulators will “uphold consistency in treating domestic and foreign [parties], provide fair treatment to domestic and foreign actors, provide equitable treatment, and form ‘multi-victory’ circumstances.”

According to Guo private capital currently accounts for 43% of total equity in Chinese joint-stock banks, 56% in municipal commercial banks, 83% in rural commercial banks and 49% in insurers, while foreign invested banks and foreign invested insurers account for 1.64% and 6.36% of total assets in their respective sectors in China.