Changes to foreign ownership rules on China financial firms effective immediately

China's announcement to further open up its financial sector comes after President Donald Trump's state visit in which he called for a more level playing field in the huge economy for US firms

China's announcement to further open up its financial sector comes after President Donald Trump's state visit in which he called for a more level playing field in the huge economy for US firms

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Vice-minister of finance Zhu Guangyao announced in Beijing on Friday that the government will increase or remove foreign ownership caps on banking, insurance, securities, futures, and asset management companies.

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At present, the limit on foreign ownership is 25 percent for publicly traded securities firms and 49 percent for most other financial businesses. Regulators are drafting detailed rules, which will be released soon, he said. "It shows that after the 19th party congress, the new leadership is still committed to financial liberalisation and opening up", Jianguang Shen, chief economist at Mizuho Securities Asia in Hong Kong, told FT. That will happen "in accordance to China's own timetable and road map", the ministry said, following a meeting between Trump and his counterpart Xi Jinping.

The statement also suggested that overseas interests will now be allowed to wholly own mainland-based investment banks - "securities brokerages", to use the Chinese government parlance - and, in due course, insurance companies.

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China observers will see this as a victory for the liberalising tendencies of the outgoing central bank governor Zhou Xiaochuan, who said earlier this year that lack of foreign competition had made Chinese financial institutions "lazy".

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