China pledged to keep nudging open the door to its mammoth financial industry — but it will do so at its own pace.
On Thursday, amid a slew of Sino-U.S. dealmaking during President Donald Trump’s visit to China, the Foreign Ministry said entry barriers to sectors such as banking, insurance, securities and funds will be “substantially” eased. That will happen “in accordance to China’s own timetable and road map,” the ministry said, following a meeting between Trump and his counterpart Xi Jinping.
The ministry also said that China had urged the U.S. to push forward an application by China International Capital Corp. for a U.S. financial license. The two countries announced Thursday $250 billion in investment deals, many of which came in the form of tentative agreements.
The comments will be encouraging to foreign banks, asset managers and insurers, who have long been kept on the margins in China, the world’s second-largest economy, by various barriers. Among changes at the top of global banks’ wish list: permission to amass majority stakes in local securities joint ventures. They’re currently limited to 49 percent.
The cap has frustrated foreign banks’ attempts to compete effectively with domestic securities firms and was behind JPMorgan Chase & Co.’s move to exit its venture, as it sought a new structure that would give it more say in decision making.
The U.S. bank is making preparations so that it can operate a securities business in China with or without local partners, its Asia-Pacific chief Nicolas Aguzin told Bloomberg Television earlier on Thursday.
The pledge for measured reform follows steps that China has already taken to gradually open up its $40 trillion financial sector. That includes allowing foreign investors greater access to its equities and debt markets through trading links with Hong Kong.
The People’s Bank of China was drafting a package of reforms which would give foreign investors greater access to the financial services industry, people familiar with the matter told Bloomberg in September. In August, China’s cabinet said the country will continue to open up various industries, including banking, securities and insurance as well as electric cars.