Financial opening-up can help Beijing reform international system as world economy seeks direction

The Chinese mainland has further opened its stock market by allowing more overseas individual investors to open A-share accounts. Although the China-US trade dispute has further escalated as both sides lob threats of new tariffs, China’s pledge to open its financial services market to foreign players isn’t just empty talk.

Central bank governor Yi Gang wrote an article, saying that China needs to promote comprehensive opening of the financial industry. The country has already set a timetable for financial opening and will continue to stick to its opening-up strategy, Yi wrote.

Protectionist measures will lead to complacency and weakness, resulting in low competitiveness and hurting the industry’s development. China has taken many measures to make its stock market more accessible to foreign investors. Although the stock market is undergoing a testing time of uncertainty and change due to economic reforms, China should continue to open its financial market wider to increase its global competitiveness.

With sustained reform, China has seen a rising level of integration with global financial markets. The country has been increasingly involved in building a fairer international financial order. For instance, MSCI Inc’s inclusion of mainland-listed stocks in its global indexes is a symbolic yet important step that will increase China’s influence on the international stage.

With “America First” as his guiding principle, US President Donald Trump has turned the US into a destroyer of the global financial order. US protectionism and unilateralism is an important source of many problems now being faced by the global economy. The world economy is at a crossroads and in desperate need of adjustment.

China’s economy and its financial market are not broad and open enough, and the country needs to be better integrated with global markets. China can serve as a positive force to reform the international financial system, but only if the country can further open up its financial services market to foreign players.