China on Wednesday announced plans to remove single shareholder caps for local banks, plus eleven other new measures aimed at further opening up its financial sector to foreign banks and insurers.
The China Banking and Insurance Regulatory Commission (CBIRC) announced that it will eliminate single shareholder limits for local banks, plus allow foreign financial firms to buy shares in foreign insurers in China. These are amongst the dozen measures aimed at opening up China's $44-trillion financial sector and comes at a time when US delegates headed by US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin were holding the latest round of talks in Beijing.
«Under the principle of treating foreign and domestic companies equally, we will remove caps on both foreign and domestic single shareholders' investment in a local commercial bank,» said Guo Shuqing, Party Secretary of the Chinese central bank and head of CBIRC in an announcement on the regulator's website (in Mandarin).
Signs Of A Deal?
Economists and political observers say that the announced measures to open up China's financial sector are a sign from Beijing that a deal ending the trade war is about to happen. The fact that CBIRC gave much more detail on the new regulations than usual suggests that the trade talks may have acted as a catalyst.
«I think all these measures have been mentioned in the trade talks. The announcement was made before a trade deal has been reached, which shows China’s sincerity in the trade talks,» said Ding Shuang, chief Greater China economist for Standard Chartered Bank, who was quoted in the «South China Morning Post».
Quickening The Pace of Liberalization
Nick Marro, an Asia analyst with the Economist Intelligence Unit (EIU) concurs. He believes that the moves are «likely owing in part to pressure from the trade talks.»
In the last few years, the Chinese government signaled its wish to speed up its financial market liberalization. Last year, the banking regulator removed the limits on foreign ownership of Chinese lenders and bad debt managers.
