China mulls removing ownership caps for financial institutions

Pedro Gonçalves
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China mulls removing ownership caps for financial institutions

Chinese financial regulators are considering removing limits on foreign ownership of domestic financial institutions, a key concession that has been long sought by the US during the trade war negotiations.

Yi Gang, governor of the People's Bank of China, said the central bank would support a pilot programme based in Shanghai to remove the foreign ownership limit in firms providing securities and fund management services.

The effort was part of measures to help build the city into an international financial centre, he said.

Regardless of how the external environment changes, we will firmly promote the opening up"

The governor  was speaking at the Lujiazui Forum in Shanghai. The annual forum, which started in the city in 2008, attracts leading Chinese figures in economics and finance from both government and the private sector.

Foreign investors and financial service providers have been looking to gain greater access to the Chinese market for years with the US also asking for China to further open up its financial industry to more international companies in recent trade talks.

While, China has made some relaxations, allowing companies such as JPMorgan Chase, UBS Group and Nomura Holdings to take majority stakes in their local securities ventures, these companies are still subject to an ownership cap of 51%.

Yi Huiman, chairman of the China Securities Regulatory Commission (CSRC), said he would push forward with plans to liberalise market access in nine areas. These included a further relaxation on access to capital markets, a broadening of cross-border investment channels and targets, and measures to facilitate trading and fundraising by foreign players.

"China's capital markets have been facing increasing external uncertainties. Regardless of how the external environment changes, we will firmly promote the opening up," Huiman said.

 

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