Officials: rich fruits for China's financial opening up

China’s opening up policies in the financial industry have been well received by the market and rich fruits have been reaped during the past one and half year, officials said.

Qi Xiang, deputy director of the general office of the China Banking and Insurance Regulatory Commission, said at a preparatory conference for the upcoming Lujiazui Forum that the watchdog had approved nine foreign-funded institutions’ applications to enter the Chinese market and 50 foreign applications to set up branches since last year’s Boao Forum.

China is currently host to 41 foreign-owned banks, 57 foreign-funded legal person insurers, 14 foreign insurance intermediaries and 136 insurance representative agencies.

Beijing has accelerated efforts to expand financial opening up, with 15 new measures unveiled by CBIRC in April 2018, including the loosening or cancellation of foreign ownership restrictions and relaxation of market entry conditions for foreign- invested institutions.

This May, the watchdog announced 12 new measures, further opening up a US$44 trillion financial sector. The measures cover banks, trust companies and insurance brokerages. For example, to encourage more eligible foreign brokerages to enter the market, previous requirements on their operational history and total assets will be eliminated.

In this fresh round of opening up, Shanghai has been at the very forefront, Qi noted.It has brought together financial resources and attracted more international investors.

Last November, CBIRC gave the nod for German insurer Allianz to set up a wholly-owned insurance holding company in Shanghai, the first of its kind.  ICBC-AXA Life Insurance Co and BoComm Life Insurance were approved to establish wholly-owned subsidiaries for asset management in last May and July, respectively. By the end of 2018, Shanghai was home to 53 foreign-invested insurers, with 27 of them with headquarters in the city.

During the same period, total assets of foreign banks in the city reached 1.5 trillion yuan, a seven-fold increase compared with the end of 2001.

Meanwhile, great progress has been made for pushing the cooperation between domestic and foreign players. In 2018 alone, there were 102 new joint projects in areas like overseas bond issuance and underwriting and syndicated loans and the amount of these projects came in nearly 400 billion yuan, more than four times that of 2017.

The top banking regulator noted that opening up will be conducive to the country’s financial structural supply-side reform and help boost more quality financial services to the real economy.

Next, they will speed up relevant system constructions and conduct more real-time regulatory analysis and strengthen the supervision capabilities, in an bid to build a more accommodating, targeted and effective regulatory system, the official added.

Also, China is taking solid steps to widen foreign access to its capital markets. Li Gang, deputy director of the general office of China Securities Regulatory Commission, said the country has seen rising foreign participation and among the 13 securities joint ventures, three are majority-owned by foreign companies.

Other progresses are like the rising inclusion factor of A-shares in MSCI and Chinese bonds’ inclusion to Bloomberg Barclays Global Aggregate Index.

Li noted that they plan to strengthen the resilience of the capital markets by guiding more long-term funds into the A-share market in the future.