Foreign-owner limits in finance end next yearTop News | REUTERS 3 Jul 2019
China will end ownership limits for foreign investors in its financial sector in 2020 - a year earlier than scheduled - Premier Li Keqiang has revealed.
The manufacturing sector will also be opened further, including the auto industry, and China will reduce its negative investment list that restricts foreign investment in some areas, Li said yesterday at the World Economic Forum in the port city of Dalian.
Beijing's signal that it is quickening the pace of opening up came after the leaders of China and the United States agreed at the weekend to restart trade talks in another attempt to end a bruising tariff war.
But analysts doubt a ceasefire will lead to a sustained easing of tensions and warn that lingering uncertainty could dampen corporate spending and global growth.
"We will achieve the goal of abolishing ownership limits in securities, futures and life insurance for foreign investors a year earlier than the original schedule of 2021," Li said.
Foreign investment banks such as Morgan Stanley are looking to join HSBC, JPMorgan Chase, Nomura Holdings and UBS Group in owning controlling stakes in onshore securities joint ventures in China under liberalized rules announced in 2017.
"JPMorgan welcomes any decision made by the Chinese government that looks to liberalize its financial sector further," said the bank's China chief executive, Mark Leung.
Citigroup, which is in the process of setting up a majority-owned securities joint venture in China, also welcomed "any move that leads to the further opening up of the Chinese financial system."
Beijing has recently allowed many foreign financial firms to either set up new businesses onshore or expand their presence through majority ownership in domestic joint ventures across mutual funds, insurance and brokerage businesses.
Morgan Stanley is likely to get regulatory approval for owning a majority stake in the second half of this year.
China is moving forward the schedule to show the world that it will not stop opening up its financial sector, Li said, adding that the government will also reduce restrictions next year on market access for foreign investors in the value-added telecoms services and transport sectors.
Leaders of the G20 major economies had at the weekend warned of growing risks to the global economy but stopped short of denouncing protectionism after talks some members described as difficult.
Echoing the sentiment, Li said protectionism is rising amid a slowing global economy, and common ground must be sought. "I believe people are all in the same boat. We should promote the spirit of partnership, carry out equal consultations, seek common ground while reserving differences and manage and control disputes," Li said.