China Aims to Unwrap the Finance Sector for Foreign Investments in 2020 A Year Before It Was Planned

China Aims to Unwrap the Finance Sector for Foreign Investments in 2020 A Year Before It Was Planned

With China’s intention to open up its finance sector for foreign investments earlier than planned, the two notable opportunities that arose include:

  1. The restriction on foreign shareholders for owning insurance, fund, and security management firms will be removed in the year 2020
  2. Foreign investors will be buoyed up to establish pension management companies, wealth management firms, and currency brokerages

On Saturday, a central bank committee called the Financial Stability and Development Committee announced that China is planning to implement these strategies in 2020, i.e. a year before it was actually planned. The limitations on foreign investment in the finance sector were lifted the same day to fight slow growth and a deteriorating trade war with the United States.

The statement issued further confirmed that overseas investors will be cheered to launch firms engaged in operations like wealth management, pension management, and currency brokerages.


Apart from these two notable changes, the entry constraints or barriers for foreign insurance companies were also scrapped out. These mainly included strict criterion like only allowing businesses with at least 30 years of operating tenure. The 25% equip cap on foreign proprietorship of insurance and asset management firms was also canceled and externally-owned credit rating agencies were also permitted to assess and rate a vast number of debt and bond types.

The Chinese capital has also pledged to further uncover opportunities for foreign businesses to participate and invest in the world’s largest economy that China is.

In the month of November last year, Beijing allowed Allianz in Germany to set up a subsidiary that is 100% foreign-owned and France’ Axa to take full charge of its collaborative venture; both of which are European insurers.

Later in December, Swiss Bank UBS was also authorized by a securities regulator in China to take charge of its domestic business.

A meeting was conducted ahead of the announcement made on Saturday where policymakers discussed ways to better tackle financial risk and hurdles. The members also pledge to aid growth in this particular meeting led by trade and industry tsar Liu He, confirmed a statement released by the State Council.

However, nothing about the next high-end trade talk with the United States is certain yet.