An official state news outlet has published an opinion piece on China’s plans to further open up its finance sector in the wake of US President Donald Trump’s official visit to Beijing.
The opinion piece by Liu Yuze (刘宇泽), published by the Xinhua-run Shanghai Securities Journal on 10 September, said that in the wake of two days of discussion between President Xi Jinping and President Donald Trump, China would “greatly reduce the threshold for market entry into its finance sector, including the banking sector, securities fund sector and insurance sector, on the basis of its own timetable and map for expanding openness.”
China will in turn require that the US “pragmatically loosen export restrictions on the export of hi-tech products to China, fulfil the duties of article 15 of China’s WTO Accession Protocol, and fairly treat Chinese enterprises investing in the US, and advance the schedule for Chinese finance companies to independently apply for relevant financial business licenses in the US.”
Liu also indicated that China would gradually reduce tariffs on automobiles, as well as undertake trials to loosen foreign-investment restrictions for specialist vehicle and clean vehicle producers in the country’s free trade zones prior to June 2016.
China’s top policymakers have sent strong signals throughout year 2017 they plan to further open the country’s finance sector to overseas investment.
At the 19th National Chinese Communist Party Congress Guo Shuqing, the head of China’s banking regulator, emphasised the need for China to open its finance sector further.
Guo that the declining market share of foreign banks in China boded poorly for competition, and that overseas lenders would be given “more room” when it comes to ownership and business scope.
In June central bank governor Zhou Xiaochuan said at the Lujiazui forum that China’s finance sector needed to be further liberalised and opened up to foreign capital, in order to improve its efficiency and reduce risk.
“The experience of many countries including China itself clearly indicates that protectionism leads to sloth…[we] must firmly walk along the path of external reform. From the experience of opening up of the manufacturing and services sector we can deduce that the financial sector is no exception, and the similar application of competitive and opening principles will enable the financial sector to see even better development,” said Zhou.
In August the State Council released the “Notice on Several Measures for Expediting Growth in Foreign Investment” (关于促进外资增长若干措施的通知), which called for further reduction of restrictions on inflows of foreign capital.
According to the Notice the “active usage of foreign capital is a key aspect of China’s foreign openness strategy,” and highlighted the banking, securities and instance sectors as ripe for opening to foreign investment, as part of efforts to “optimise and restructure domestic enterprise…and encourage foreign capital to participate in mixed-ownership reforms of state-owned enterprises.”
Sources said to Bloomberg in September that that the Chinese central bank was working on a raft of proposals to further liberalise the banking and finance sector.