China to ease curbs on foreign ownership, tariffs

‘FULL OWNERSHIP’::Chinese Vice Minister of Finance Zhu Guangyao said that China would abolish limits on foreign ownership stakes and reduce automotive import tariffs

AP, BEIJING

Sat, Nov 11, 2017 - Page 10

China is to ease restrictions on foreign ownership stakes in the financial sector and reduce tariffs on automotive imports, a senior Chinese official said yesterday, following criticism from the US and other trading partners.

Chinese Vice Minister of Finance Zhu Guangyao (朱光耀) said at a briefing following a state visit to China by US President Donald Trump that China would lift limits on foreign ownership stakes in securities, fund managers and futures companies from 49 percent to 51 percent and end restrictions after three years.

China would similarly raise such limits in insurance companies and eliminate curbs after five years, he added.

“In other words, foreign owners can have full ownership of such companies” after three to five years, Zhu told reporters.

The moves appeared aimed at addressing mounting foreign complaints about China’s trade surpluses and market barriers.

China is also to “abolish” limits on foreign ownership stakes in banks, Zhu said, though he did not say when the move would take effect.

Until now a single foreign investor could own no more than 20 percent of one bank, and a bank could have no more than 25 percent total foreign ownership.

Beijing is also to gradually reduce tariffs on automotive imports, Zhu said, without providing details.

“This opening up is decisive and the effect will be far-reaching,” Zhu told reporters.

Trump has made narrowing the US trade deficit with China — US$347 billion last year — a priority.

US Secretary of Commerce Wilbur Ross said that was a “central focus” of Trump’s talks with Chinese President Xi Jinping (習近平).

Prior to Trump’s visit, the American Chamber of Commerce had expressed concern that the president’s focus on trade in goods might mean that he would pay less attention to equally important issues, such as complaints about restrictions on access to finance, healthcare and other industries in China’s state-dominated economy.

During Trump’s visit, Chinese and American companies signed a series of multibillion-dollar business agreements in a tradition aimed at blunting criticism of Beijing’s trade policies.

Chinese Minister of Commerce Zhong Shan (鍾山) said agreements signed on Thursday at a ceremony attended by Trump and Xi totaled US$253.4 billion, though many were memoranda of understanding or other arrangements that were less than firm contracts.

Commercial sales announced appeared to total about US$65 billion, many involving goods that Chinese companies routinely buy.

Such contract signings are a fixture of visits to Beijing by foreign leaders and are meant to defuse foreign complaints about China’s trade surpluses and market barriers. They often represent purchases already made by Chinese mobile phone makers, airlines and other customers that are collected for the visit, which means that they have little effect on the trade balance.

The contracts give Trump the opportunity to claim a rare political win following a first year in office marked by little legislative progress on healthcare or taxes.

China’s trade surplus with the United States widened by 12.2 percent last month from the previous year to US$26.6 billion. The total surplus with the US for the first 10 months of the year rose to US$223 billion.