In November 2019, the State Council of China issued the Opinions on Further Improving the Utilization of Foreign Investment (Guo Fa 2019 No. 23), aiming to help further promote development and vitality of the financial sector. The document put forward a total of 20 policy measures in four aspects:
- Expansion and opening up of the financial sector
- Ramping up of efforts to promote further investment
- Deepening of reforms to facilitate investment
- Protection of rights and interests of foreign investors
With regards to further opening up of the finance sector, the Opinions proposed the implementation of the following key measures:
- Lift all restrictions on the scope of business of foreign financial institutions operating in China, such as banks, securities companies and fund management companies
- Reduce quantitative entry conditions for foreign investors in establishing banking and insurance institutions
- Abolish the total assets requirement for foreign banks to set up locally incorporated banks and branches
- Remove the operational period and total assets requirements for foreign insurance brokers to operate insurance brokerage businesses
The release of the Opinions signaled that China’s financial opening up has again been advanced, and that its pace towards financial globalization has been quickened.
The opening up of China’s trillion-dollar financial sector has advanced significantly since April 2018, with the government issuing dozens of policies to restructure the industry. In particular, in July 2019 the Office of the Financial Stability and Development Committee announced The 11 Measures Of The FSDC (FSDC-11 Measures) under the State Council, an important milestone on the financial market’s road to full opening. As global investors and foreign financial institutions continue to enter the mainland China market we can expect the range of foreign participants to expand, with the market growing deeper and more diversified. In turn, this will bring new opportunities and support further development of China’s real estate market.
