For­eign in­vestors get greater ac­cess

China Daily European Weekly - - Business - By WANG YANFEI wangyan­[email protected]­

China plans to step up ef­forts to deepen re­forms by grant­ing more ac­cess to over­seas com­pa­nies and in­di­vid­u­als to make in­vest­ments in the coun­try’s free trade zones, the lat­est in its ef­forts to fur­ther open up the fi­nan­cial sec­tor for in­vestors.

A to­tal of 12 new mea­sures cov­er­ing se­cu­ri­ties, in­sur­ance and bank­ing ser­vices will be adopted in the free trade zones to bet­ter sup­port the de­vel­op­ment in the pi­lot re­gions and the non­fi­nan­cial sec­tor, ac­cord­ing to a guide­line re­leased by the State Coun­cil, China’s Cab­i­net, on Nov 23.

For in­stance, banks in free trade zones will be al­lowed to con­duct yuan de­riv­a­tive busi­nesses on be­half of over­seas in­sti­tu­tions, and qual­i­fied in­di­vid­u­als will be al­lowed to in­vest in over­seas se­cu­ri­ties di­rectly in the pi­lot re­gions, ac­cord­ing to the guide­line.

These new mea­sures, which will be adopted first in the coun­try’s 12 free trade zones, in­clud­ing Shang­hai and Chongqing, might be grad­u­ally in­tro­duced to other re­gions af­ter the gov­ern­ment gains some ex­pe­ri­ence.

Such ef­forts are ex­pected to at­tract more over­seas in­vestors to China’s fi­nan­cial mar­ket and pro­mote the free flow of funds, Xu Zhong, di­rec­tor-gen­eral of the Re­search Bu­reau of the Peo­ple’s Bank of China, the cen­tral bank, said dur­ing a brief­ing on Nov 23.

The cen­tral bank will grad­u­ally shorten the neg­a­tive list in the fi­nan­cial sec­tor and fur­ther re­move the caps on share­hold­ings by over­seas fi­nan­cial in­sti­tu­tions in sec­tors that re­quire fi­nan­cial li­censes, he said.

As part of ear­lier pledges to fur­ther pro­mote open­ing-up, China has in­tro­duced a slew of mea­sures to grad­u­ally grant more ac­cess to over­seas inves- tors and re­duce red tape while striv­ing to en­sure fi­nan­cial sta­bil­ity.

Over­seas fi­nan­cial in­sti­tu­tions have started to ap­ply for greater ac­cess af­ter the gov­ern­ment rolled out these guide­lines.

No­mura Se­cu­ri­ties and JPMor­gan Chase have sought per­mis­sion to launch ma­jor­ity-owned bro­ker­ages in China, with an eye on gain­ing con­trol of their joint ven­tures in China by lift­ing their stakes in the busi­ness to 51 per­cent.

On Nov 13, JPMor­gan’s ap­pli­ca­tion for the es­tab­lish­ment of a for­eign-in­vested se­cu­ri­ties com­pany re­ceived feed­back from the China Se­cu­ri­ties Reg­u­la­tory Com­mis­sion.

Zhang Xiao­jing, a se­nior re­searcher with the Chi­nese Academy of So­cial Sciences, said the build­ing of an open eco­nomic sys­tem means higher re­quire­ments to bet­ter reg­u­late the fi­nan­cial sec­tor.

The gov­ern­ment needs to pay at­ten­tion to pre­vent fi­nan­cial risks and make sure fi­nan­cial su­per­vi­sion ca­pa­bil­i­ties can be matched with fi­nan­cial open­ness, Zhang said.


A bird’s eye view of the port for ve­hi­cles at the Nan­sha area of the Guang­dong Pi­lot Free Trade Zone in Guangzhou.

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