International financial firms have vowed to speed up their expansion in mainland China after the country announced it would bring forward a raft of measures aimed at opening up the sector.
Beijing will scrap shareholding limits on foreign ownership of securities, insurance and fund management firms in 2020, one year earlier than initially planned, according to a statement posted by the People's Bank of China on its website on Saturday.
By opening up its financial industry to more foreign participation Beijing hopes to attract capital investment to help rescue the country's stuttering economy.
It also announced it would scrap the requirement that international insurance companies need to have 30 years of operational history before they can apply to set themselves up in the world's largest economy. And it will abolish the 25 per cent equity cap on foreign ownership of insurance-asset management firms.
The central bank's statement said it would welcome overseas investors who wish to set up or own a stake in mainland securities firms, currency brokerages and pension companies. The PBOC also said it would allow foreign and pension management companies.
"This is warmly welcomed by global managers," said Sally Wong, chief executive of the Hong Kong Investment Funds Association. "China is a market no global managers can ignore, both inbound and outbound.
"The increasing affluence of the population, the need for diversification and financial planning, and the reform in the pensions system all mean that there are huge opportunities for foreign managers."
Eleanor Wan, chief executive of BEA Union Investment Management, plans to speed up her company's expansion in China after the latest announcement.
"We welcome the new development and moving [the plans] up the agenda. We believe this approach will encourage more foreign asset-management companies to set up their wholly-owned subsidiaries in China," she said.
"BEA Union Investment has already set up in Quanhai. We will continue and speed up our development in China."
Claude Haberer, head of Swiss financial firm Pictet Wealth Management in Asia, said the latest policies "will definitely entice a number of institutions to invest more in this huge market as they will be able to control their local entity."
Hong Kong Securities Association chairman Gary Cheung Kwok-wai, however, said it would need to wait for the announcement of the full details.
"The opening up is a good gesture, but we would need to know the implementation details. As an example, China still has foreign exchange controls and capital controls. We wonder, therefore, how currency brokers can come into play," Cheung said.
The latest moves towards a more open market comes as China is hoping to boost foreign capital as it struggles with an economic slowdown compounded by its year-long trade war with the US. China's gross domestic product grew at 6.2 per cent in the quarter that ended in June, the slowest quarterly growth rate since 1992, according to government figures released last week.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2019 South China Morning Post Publishers Ltd. All rights reserved.
Copyright (c) 2019. South China Morning Post Publishers Ltd. All rights reserved.