BOAO (Hainan) • China has laid out a clearer timetable for opening its financial sector to more foreign investment by the end of the year, as Beijing looks to fend off growing criticism from the United States and other trading partners that it unfairly limits competition.
People's Bank of China (PBOC) governor Yi Gang yesterday said China will let foreign firms compete on an equal footing with domestic companies in the financial sector, giving foreign banks more business scope in the country.
Though the details offered were mostly incremental, China for the first time said it would implement various measures by year-end, with some steps to be in place as early as June.
They include allowing foreign firms to invest in trust companies, financial leasing, auto finance and consumer finance, plans that were announced last year.
The PBOC also confirmed that it aims to launch a planned trading link between its stock markets and London by the end of the year.
Foreign businesses and China's trading partners have long complained about a lack of implementation of reforms announced years earlier, and that outside firms continue to face unofficial restrictions even after some sectors have ostensibly been opened up.
Beijing's official pledges, made at the annual Boao Forum for Asia in southern Hainan province, echoed previous promises to open the financial sector but come at a time of heightened pressure on China from the US over trade.
China will raise foreign ownership limits to 51 per cent in securities, fund management, futures and life insurance companies "over the next few months", the PBOC said on its website.
The current ownership cap for securities, futures and fund management firms is 49 per cent and the cap for insurance companies is 50 per cent.
The gradual removal of those limits was first announced in November, when an official said the move would take effect immediately following the drafting of related rules.
President Xi Jinping promised on Tuesday to open the economy further and lower import tariffs on products like cars, in a speech seen as an attempt to defuse the increasingly bitter trade dispute with the US and possibly open the way for the start of negotiations after both sides threatened tit-for-tat tariffs.
"The greater detail on the timing of implementation may indicate China's desire to avoid an escalation in trade restrictions and to boost market confidence," rating agency Moody's said yesterday.
The government also will not set foreign ownership limits for investment in wealth management companies set up by commercial banks by the end of 2018, the PBOC said.
China also said it was accelerating a plan originally announced in November to lift foreign ownership restriction in life insurance companies, following Mr Xi's pledge the day before to speed up the opening up of the insurance sector.