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(Bloomberg) -- China will remove foreign ownership limits on its banks and asset-management companies, and allow overseas firms to take controlling stakes in local securities ventures, as the country continues to liberalize its mammoth financial industry.
Foreign firms will be allowed to own up to 51 percent in securities ventures, Vice Finance Minister Zhu Guangyao said at a briefing in Beijing on Friday. Regulators are drafting detailed rules, which will be released soon, he said.
On Thursday, amid a slew of Sino-U.S. dealmaking during President Donald Trump’s visit to China, the Foreign Ministry said entry barriers to sectors such as banking, insurance, securities and funds will be “substantially” eased. 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 moves would be encouraging to foreign banks, asset managers and insurers, who have long been kept on the margins in China, the world’s second-largest economy, by various barriers. Global banks are currently limited to owning 49 percent of local securities joint ventures, frustrating their attempts to compete effectively with Chinese rivals.
That cap was behind JPMorgan Chase & Co.’s move to exit its China venture, as it sought a new structure that would give it more say in decision making.
China has already taken steps to gradually open up its $40 trillion financial sector, including allowing foreign investors greater access to its equities and debt markets through trading links with Hong Kong.
The People’s Bank of China was drafting a package of reforms which would give foreign investors greater access to the financial services industry, people familiar with the matter told Bloomberg in September.
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