36 BEIJING REVIEW AUGUST 1, 2019 http://www.bjreview.comBUSINESS
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he Office of the Financial Stability and
Development Committee of the State
Council, China’s cabinet, announced 11
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sector on July 20, in the latest move to help
bolster and stabilize growth. The new measures
cover multiple areas ranging from the bond
market, banks, insurance companies, brokerage
companies to the securities market.
This followed the release of the Special
Administrative Measures (Negative List) for
Foreign Investment Access (2018) on June 28
last year, which greatly lowered the market
threshold and eased restrictions on market
access for foreign investment in various sec-
tors in its 22 measures. In the finance sector,
China will cancel equity caps for foreign invest-
ment in banking, as well as relax foreign equity
caps to 51 percent for securities firms, fund
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insurance companies. All foreign equity caps in
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The two most important features of the new
round of opening up are the acceleration of
opening up and the opening up in new areas,Cao Yuanzheng, an economist with Bank of
China International, an investment bank, told
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Foreign brokers, who wish to start a se-
curities business in China, must establish joint
ventures. In 1995, China’s first joint venture
investment bank, China International Capital
Corp. Ltd., was established and today there are
14 joint-venture brokers in China. However,
until it was scheduled for complete cancella-
tion by 2021 last year, there had always been a
limit on their shareholding ratio. Now, the new
measures have pushed the cancellation ahead
to 2020.
“The world economy is facing challenges
on whether to continue globalization,” Cao said,
adding that the new measures to push ahead
of schedule reflect China’s clear position on
championing globalization.
Lu Ting, chief economist at Nomura, an
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forward the schedule showcases China’s resolve
to open up its market, which will encourage a
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and expand their business in the country.
The new measures also highlight reform
in areas such as credit rating and pensionmanagement, which have not been main-
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“We lack experience compared to other
countries that are proficient in techniques,
experience and talent due to long histories of
development in these areas,” he said. “However,
there is a huge potential for these businesses
in the future. If we want to get our foot in them,
foreign investment has to come in and only in
this way can the industry grow among fierce
competition.”
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established a wholly-owned subsidiary in Beijing
to conduct bond rating business, with certain
limitations, in the interbank bond market.
However, the new measures will allow it to carry
out all types of bond ratings, and more interna-
tional companies like S&P Global are expected
to enter China’s credit rating market.
“The opening up of the credit rating busi-
ness is of great importance since the bond
market has a great impact on China’s capital
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said.
“If China wants to build a healthy bond mar-
ket and attract more foreign investors, credit
rating institutions can be a key factor,” Quan
Dejian, Director of the United Overseas Bank
Global Economics and Markets Research, said,
adding that the entry of wholly owned foreign
institutions will introduce mature credit rating
models and further shore up the credibility of
the Chinese market.
In addition, as China’s population increas-
ingly ages, providing wealth management
products for seniors has also become an inno-
vative area.
“Services for seniors are a challenge for do-
mestic and international companies and both of
them will be at the same starting line,” Cao said.
“Opening up not only provides international
institutions with opportunities, but also meets
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With the public pension system as the
mainstay, China’s pension management enter-
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pilot pension management enterprises are un-
der a strict approval system and so far, only one
company has gotten through the process: the
China Construction Bank Pension Management
Co. Ltd. established in 2015.
The new measures welcome foreign-
$QDHULDOYLHZRIWKHLFRQLF%XQGDQG/XMLD]XLDUHDVWKHĶQDQFLDOGLVWULFWLQ6KDQJKDL invested pension management enterprises—XIN
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AUnlocking Finances
New measures lead China’s opening up in the financial sector to a higher level
By Zhang Shasha