China yesterday said it would bring forward plans to remove foreign ownership limits on financial companies, as it speeds up efforts to open the US$44 trillion industry to overseas competitors.
Full foreign ownership of securities firms, futures businesses and life insurance companies would be allowed by next year, Chinese Premier Li Keqiang (李克強) said at the World Economic Forum in Dalian.
It is the latest step in the country’s financial-opening policy, a push that was unveiled in late 2017 and which has seen companies including UBS Group AG and JPMorgan Chase & Co take measures to increase their onshore presence.
Li’s announcement, which came days after the presidents of China and the US agreed to resume trade negotiations, shows that the financial-opening policy remains on course despite broader political tensions.
It is also a way for China to show it is open to cross-border business and a signal to Wall Street firms that are circling one of the world’s biggest markets that their investments are welcome.
“This is good news for foreign investors and global financial institutions looking to expand and gain a foothold in the Chinese financial market,” said Hubert Tse (謝鴻銘), partner at Boss & Young law firm in Shanghai. “Despite the ongoing trade talks with the US, Beijing is sending out signals to the world it is determined and committed to continue further opening up China’s markets.”
Last year China began allowing overseas firms to apply for majority stakes in financial industry joint ventures as part of its effort to level the playing field between domestic and foreign players. In May, the government said it would lift single-shareholder limits on local banks and scrapped some asset requirements for foreign companies to operate onshore.
“The reason we moved the schedule ahead is to declare to the world that in the financial services sector we will not only keep up the pace of opening, we will also accelerate,” Li said.
Authorities have so far approved plans by UBS, Nomura Holdings Inc and JPMorgan to take majority stakes in local securities ventures. Firms including Morgan Stanley and DBS Group Holdings Ltd are in the process of seeking to gain control.
This week, the local partners of Morgan Stanley and JPMorgan’s onshore joint ventures announced they would sell stakes in the businesses that would give control to the US firms.
“JPMorgan welcomes any decision made by the Chinese government that looks to liberalize its financial sector further,” JPMorgan chief executive officer for China Mark Leung (梁治文) said in an e-mailed statement.
The announcement “sends a strong signal that China is committed to further opening up,” said Hu Lei (胡磊), a Beijing-based partner at LLinks Law Offices (通力律師事務所). “Foreign firms seeking to raise ownership would probably need to bring forward their plans.”
Li also announced that the government would further open its manufacturing sector, including the auto industry, while reducing its negative investment list that restricts foreign investment in some areas, including the value-added telecoms services and transport sectors.
“In the face of pressure from a slowing pressure global economy, I believe people are all in the same boat. We should promote the spirit of partnership, carry out equal consultations, seek common ground while reserving differences and manage and control disputes,” Li said.
“Currently, global economic risks are rising somewhat, international investment and trade growth is slowing, protectionism is rising and unstable and uncertain factors are increasing,” Li said.
“We should actively cope with this. Some countries have taken measures including cutting interest rates, or sent clear signals on quantitative easing,” he said.
China would not resort to competitive currency devaluation, and would keep the yuan exchange rate basically stable at a reasonable and balanced level, he added.
Additional reporting by Reuters
Taiwan’s rapidly aging population is fueling a sharp increase in homes occupied solely by elderly people, a trend that is reshaping the nation’s housing market and social fabric, real-estate brokers said yesterday. About 850,000 residences were occupied by elderly people in the first quarter, including 655,000 that housed only one resident, the Ministry of the Interior said. The figures have nearly doubled from a decade earlier, Great Home Realty Co (大家房屋) said, as people aged 65 and older now make up 20.8 percent of the population. “The so-called silver tsunami represents more than just a demographic shift — it could fundamentally redefine the
Businesses across the global semiconductor supply chain are bracing themselves for disruptions from an escalating trade war, after China imposed curbs on rare earth mineral exports and the US responded with additional tariffs and restrictions on software sales to the Asian nation. China’s restrictions, the most targeted move yet to limit supplies of rare earth materials, represent the first major attempt by Beijing to exercise long-arm jurisdiction over foreign companies to target the semiconductor industry, threatening to stall the chips powering the artificial intelligence (AI) boom. They prompted US President Donald Trump on Friday to announce that he would impose an additional
China Airlines Ltd (CAL, 中華航空) said it expects peak season effects in the fourth quarter to continue to boost demand for passenger flights and cargo services, after reporting its second-highest-ever September sales on Monday. The carrier said it posted NT$15.88 billion (US$517 million) in consolidated sales last month, trailing only September last year’s NT$16.01 billion. Last month, CAL generated NT$8.77 billion from its passenger flights and NT$5.37 billion from cargo services, it said. In the first nine months of this year, the carrier posted NT$154.93 billion in cumulative sales, up 2.62 percent from a year earlier, marking the second-highest level for the January-September
Asian e-commerce giant Shein’s (希音) decision to set up shop in a historic Parisian department store has ruffled feathers in the fashion capital. Anger has been boiling since Shein announced last week that it would open its first permanent physical store next month at BHV Marais, an iconic building that has stood across from Paris City Hall since 1856. The move prompted some French brands to announce they would leave BHV Marais, but the department store had already been losing tenants over late payments. Aime cosmetics line cofounder Mathilde Lacombe, whose brand was among those that decided to leave following
RSS