Yi Gang (易纲), the governor of the People’s Bank of China (PBOC), has highlighted the external opening of the Chinese financial sector as a core strategy of the country’s future development.
Speaking at the 2020 Bund Summit in Shanghai on 24 October, Yi said that the Chinese economy is “deeply integrated into the global economic and trade system,” pointing out that during the period from 2002 – 2019 its average annual contribution rate to global economic growth approached 30%.
“Establishing a new and even more open economic system is intrinsic to the establishment of new development conditions,” said Yi.
“The establishment of new development conditions requires even better use of both international and domestic markets, and not only entails more convenient circulation of goods and factors of production, it also requires pushing for the opening of a rules based system. This is not just for the benefit of the Chinese economy, but also for the benefit of the global economy.
“Against this background, further opening up of the finical sector is an inevitable requirement for the creation of new development circumstances.
“The opening of the financial sector not only attracts institutions, businesses and products and increases the supply of financial factors of production, it also expedite the improvements of systems and regulations, and expedites supply within the financial system.”
Yi pointed out that over the past two years Beijing has unveiled over 50 financial opening measures, including full cancellation of foreign ownership restrictions when it came to the banking, securities, funds, futures and life insurance sectors.
Since 2018 China has seen the establishment of eight foreign-controlled securities companies, two foreign-controlled fund management companies, and 20 foreign-controlled privately offered securities investment fund managers.
Future opening measures outlined by Yi include:
- Comprehensive implementation of a negative list regulatory system that confers equal treatment with Chinese parties prior to market entry.
- Driving further opening of the financial services sector, reform of renminbi exchange rate formation mechanisms and further internationalisation of the renminbi.
- Risk prevention in tandem with accelerated opening – stronger macro-prudential regulation, and the establishment of various firewalls to raise the ability to prevent and dissolve major forms of risk.