CHINA PLANS MORE REFORMS?
New package may include giving permission to foreign bodies to control local ventures and raising ownership ceiling
CHINA’S central bank is drafting a package of reforms which would give foreign investors greater access to the nation’s financial services industry, said people familiar with the matter.
The People’s Bank of China will convene an internal meeting today to discuss its proposals and get feedback from Chinese institutions, said the people.
The meeting will discuss the timetable for opening up the financial sector and the lessons learned from previous cooperation with foreign firms, said the people.
While the details of the plan have yet to be finalised, it may include permission for foreign institutions to control their local finance-sector joint ventures, as well as raising the current 25 per cent ceiling on foreign ownership in Chinese banks, said the people.
It may also allow foreign firms to provide yuan-denominated bank card clearing services. The China Banking Regulatory Commission is involved in the proposal, said the person.
China sent a signal that it plans to press ahead with opening up the financial sector when central bank governor Zhou Xiaochuan said in June that too much protection for domestic institutions weakens the industry and can lead to financial instability.
Last month, China’s cabinet said the country will continue to open up various industries, including banking, securities, insurance as well as electric cars.
Currently, overseas investment banks can only hold minority stakes in their local securities joint ventures, and have been largely excluded from lucrative businesses such as secondarymarket trading in Chinese debt and equities, as well as from managing money for wealthy clients.
China will open up its insurance market further, mainly by encouraging foreign insurers already operating locally to enter the health, pension and catastrophe insurance sectors, said China Insurance Regulatory Commission vice-chairman Chen Wenhui this month.Bloomberg