China and Germany signed a series of agreements to strengthen cooperation in banking and financial sector supervision, as Beijing moves to open up the country's financial markets and Frankfurt positions itself to become EU's finance powerhouse after Brexit.
German insurers can now establish wholly-owned insurance operations in China, while Chinese players are welcome to conduct reinsurance business in Germany.
The agreements were signed at the end of a two day visit by German Finance Minister Olaf Scholz to Beijing for talks with Vice Premier Liu He, China's top economic official.
"It is important that, contrary to recent trends that we can observe elsewhere, we are seeing progress in our cooperation"
"German insurers and banks will now have easier access to the Chinese market," said Scholz at the conclusion of the talks. "This is an important step that we have been waiting for a long time."
Both parties said in a joint statement that "they will strengthen macroeconomic policy coordination and pragmatic cooperation in the fiscal and financial fields and expand strategic cooperation." China is the world's second-largest economy, while Germany is the fourth-largest.
Also, German banks can now apply to become primary dealers in the open market operations of the People's Bank of China (PBOC).
"It is important that, contrary to recent trends that we can observe elsewhere, we are seeing progress in our cooperation," Scholz said before the talks, hinting at Trump's trade war.
There are about 5,200 German companies in China but very few operating in the financial sector due to decades of China's closed policy.
Chinese regulators in April 2018 started allowing overseas firms to apply for majority stakes in securities and mutual-fund management ventures and promised to permit full control in three years.
The statement said Germany welcomes China continuing to effectively further open up its financial sector while the Chinese side said it welcomes qualified German financial institutions into the Chinese market, and the German side welcomes qualified Chinese financial institutions into the German market.
The German minister hopes Chinese banks could be persuaded to open in Frankfurt, the heart of Germany's finance industry, turning the city into a European powerhouse after Britain leaves the EU.
The statement added: "The two sides support the Asset Management Association of China (AMAC) and its German counterparts 9 welcomes qualified German insurers to help drive innovation for the benefit of Chinese customers and to extend their business scope in digital insurance areas in China in line with relevant rules and regulations."