ZCZC
BCN-10
CHINA-ECONOMY-DIPLOMACY-US
China opens up finance sector to more foreign investment
BEIJING, July 20, 2019 (BSS/AFP) – China lifted some restrictions on
foreign investment in the financial sector Saturday, as the world’s second
largest economy fights slowing growth at home and a damaging trade war with
the US.
China will remove shareholding limits on foreign ownership of securities,
insurance and fund management firms in 2020, a year earlier than originally
planned, the Financial Stability and Development Committee said in a
statement posted by the central bank Saturday.
Foreign investors will also be encouraged to set up wealth management
firms, currency brokerages and pension management companies, the statement
said.
Beijing has long promised to further open up its economy to foreign
business participation and investment but has generally dragged its feet in
implementing the moves — a major point of contention with Washington and
Brussels.
Saturday’s announcement followed a Friday meeting chaired by economic czar
Liu He where policymakers focused on tackling financial risk and financial
contagion and pledged new steps to support growth, according to a state
council statement.
Additional measures include scrapping entry barriers for foreign insurance
companies like a requirement of 30 years of business operations and
cancelling a 25 percent equity cap on foreign ownership of insurance asset
management firms.
Foreign owned credit rating agencies will also be allowed to evaluate a
greater number of bond and debt types, the statement said.
US President Donald Trump has launched a damaging tariff war in an attempt
to force Beijing to further open up its economy and limit what he calls its
unfair trade practices.
The US and China have hit each other with punitive tariffs covering more
than $360 billion in two-way trade.
Trump and Xi Jinping agreed to revive fractious trade negotiations when
they met on the sidelines of the G20 summit in Japan on June 29 and top US
and Chinese negotiators have held phone talks this month.
BSS/AFP/HR/0950