China will end ownership limits for foreign investors in its financial sector including life insurnace industry,securities and futures sector, in 2020, a year earlier than scheduled, to show the world it will keep opening up its markets, Premier Li Keqiang said on Tuesday.
China will also further open its manufacturing sector, including the auto industry, while reducing its negative investment list that restricts foreign investment in some areas, Li told the World Economic Forum in the northeastern Chinese port city of Dalian.
"The reason we moved ahead the schedule is to declare to the world that in the financial services sector we will not only keep up the pace of opening, we will also accelerate." he said.
Beijing’s signal that it is quickening the pace of opening up came after the presidents of China and the United States agreed over the weekend to restart trade talks in another attempt to strike a deal and end a bruising tariff war.
But analysts doubt the ceasefire will lead to a sustained easing of tensions, and warn lingering uncertainty could dampen corporate spending and global growth.
“We will achieve the goal of abolishing ownership limits in securities, futures, life insurance for foreign investors by 2020, a year earlier than the original schedule of 2021,” Li said.
Foreign investment banks such as Morgan Stanley are looking to join HSBC Holdings PLC, JPMorgan Chase & Co., Nomura Holdings Inc. and UBS Group AG in owning controlling stakes in onshore securities joint ventures in China under liberalized rules announced in 2017.
“JPMorgan welcomes any decision made by the Chinese government that looks to liberalize its financial sector further,” said JPMorgan China CEO Mark Leung.
Citigroup, which is in the process of setting up a majority-owned securities joint venture in China, also applauded the news.
“Citi welcomes any move that leads to the further opening up of the Chinese financial system,” said a Hong Kong-based spokesman.
The United States and other countries in the West have long complained that Beijing is blocking foreign access to its fast-growing financial markets and not allowing a level playing field when multinational companies are allowed in.
But in recent months, China has allowed many foreign financial firms to either set up new businesses onshore or expand their presence through majority ownership in domestic joint ventures across mutual funds, insurance and brokerage businesses.
Sources with direct knowledge of the matter previously told Reuters that Morgan Stanley is likely to get regulatory approval for owning a majority stake in the second half of this year.
Li also said the government will reduce restrictions next year on market access for foreign investors in the value-added telecoms services and transport sectors.
On Sunday, China cut the number of sectors subject to foreign investment restrictions, a widely expected move, to 40 from 48 in the previous version, published in June last year.