Beijing: China has started lifting major restrictions on foreign investment in its financial sector, a move long demanded by the United States as the world’s two biggest economies are locked in a fierce trade battle.
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From the start of 2020, foreign banks can now set up wholly-owned branches in China without a local partner holding the majority stake, the banking regulatory authority, CBIRC, announced on Friday.
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In the past, foreign banks were required to have a local Chinese partner and not allowed to hold more than 49 percent of their respective joint ventures.
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The announcement could be seen as a gesture of goodwill by China towards the US as Washington says a preliminary trade agreement between the two sides looks set to be signed this month.
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The world’s top two economies have been waging a merciless trade war since March 2018, resulting in mutual tariffs being slapped on hundreds of billions of dollars’ worth of annual trade.
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Beijing has long promised to further open up its economy to foreign investment, but it was slow to do so in the financial sector.
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In October, China unveiled a timetable for lifting a number of the restrictions. And in December, the Swiss bank UBS was authorised to take a majority stake in its activities in the country.
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But starting from January 1, foreign companies specialising in futures contracts will now be able to invest in China with no limits on the amount of capital held.
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Fund management companies will be able to do so from April 1 and brokers from December 1, 2020.
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