36 BEIJING REVIEW FEBRUARY 13, 2020 http://www.bjreview.com
BUSINESS
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hina has been accelerating the opening
up of its capital market in recent years.
To further facilitate investment by
foreign institutions through different channels,
China lifted restrictions on foreign ownership
in some industries one year in advance, origi-
nally scheduled for 2021. It scrapped foreign
ownership limits on futures companies on
January 1, and will further lift restrictions on
foreign ownership of fund management and
securities companies nationwide on April 1 and
December 1, respectively.
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The opening up of the capital market is
necessary for driving high-quality economic
development. As China pushes ahead with eco-
nomic restructuring, it has advanced domestic
reforms and widened opening up to address
problems caused by structural adjustments and
promote a modern economic system. As a key
driving force for this development, the capital
market can inject impetus into the domestic
economy through further opening up.
Since China has shifted the focus from
high-speed growth to high-quality develop-
ment, domestic industries that underpin
economic growth are experiencing a demand
for upgrading industrial structure and improving
efficiency and quality. Along with the opening
up of the capital market, traditional industries
can be transformed and upgraded as enterpris-
es improve industrial chains through mergers
and acquisitions, optimize fund allocation
and ease the pressure caused by fund short-
ages through improving stock and increment.
Emerging industries, such as energy conserva-
tion and environmental protection, information
technology, biology and high-end equipment
manufacturing, cannot thrive without the capi-
tal market, which can buoy industries with its
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After years of transformation and adjust-
ment, China’s economic landscape has seen
major and profound changes. While the role
of investment and exports in driving domestic
economic growth has weakened, domestic
demand, especially in consumption, has played
an increasingly important role as a major driv-
ing force for stable and high-quality economicgrowth. Opening up can help sustainable and
sound development of the capital market and
ensure its wealth effect.
The growth of innovation-oriented enter-
prises also calls for the support of the capital
market. Viewed as a decisive factor in China’s
economic restructuring, innovation can be
achieved by market participants through
improving the efficiency of resources, even
though it also features great instability and un-
certainty. The capital market can accelerate theA Widening Door
China accelerates opening up its domestic capital market
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The author is an associate
researcher with the Chinese
Academy of International
Trade and Economic
Cooperation