China discloses measures and timetable on further opening-up of financial sector

BEIJING, May 2(Xinhua) -- China fleshed out measures and disclosed a timetable to further open the financial sector on April 11 at the Boao Forum for Asia 2018 held in south China's Hainan province.

China's central bank governor Yi Gang announced six measures for opening up financial sector, which will be implemented in the coming months.

1. Restrictions on foreign equity in banks and financial asset management companies will be removed, with equal treatment for domestic and foreign-funded institutions. Foreign banks will be allowed to set up branches and subsidiaries at the same time in the country.

2. Foreign equity in securities, funds, futures and life insurance companies will be capped at 51 percent, and in three years, the limitation will be canceled.

3. Securities joint ventures will not be required to have at least one securities company among its domestic shareholders.

4. Daily quotas for the stock connect schemes between the mainland and Hong Kong will be quadrupled as from May 1. The daily southbound quotas for the Shanghai-Hong Kong and Shenzhen-Hong Kong stock connects will be increased from 10.5 billion yuan to 42 billion yuan while the daily northbound quota will be increased from 13 billion yuan to 52 billion yuan.

5. Qualified foreign investors will be allowed to operate as insurance agents and appraisers in China.

6. Foreign-funded insurance brokers will have the same business scope as their Chinese counterparts do.

Meanwhile, thanks to joint efforts of China and the U.K., the Shanghai-London stock connect program goes well and may be launched within this year.

While promoting the opening up the financial sector, China will follow three principles, Yi Gang said.

First, the model of pre-establishment national treatment with a negative list should be adopted.

Secondly, the opening up of the financial sector should go together with the reform in exchange rate formation mechanism and the process of advancing capital account convertibility. China has been steadily promoting capital account convertibility in foreign direct investment (FDI) and overseas direct investment (ODI), and making efforts to channel foreign capital into its stock market and bond market and introduce China’s stock index to major stock indexes across the world.

Thirdly, while pursuing opening-up, China should attach importance to preventing financial risks. The capability of financial regulation should match the extent of opening-up.

Besides, financial institutions play critical roles in driving the Belt and Road Initiative and Renminbi internationalization. Therefore, they need to be more open to cooperation and gather together global financial resources, and innovate financial service systems, said Chen Siqing, President of Bank of China at the Belt and Road Round-table Conference of Boao Forum for Asia 2018.