China announces new measures and timeline on the further opening-up of financial sectors

On 11 April 2018, Mr. Yi Gang, the new governor of the People’s Bank of China, spoke at a sub-forum “Normalization of Monetary Policy" during the Boao Forum for Asia Annual Conference 2018 and announced a number of measures and timeline on more financial sectors opening, following President Xi’s high-level speech regarding further opening of foreign investment regime on 10 April.

In the next few months (likely by 30 June 2018), among others:

• foreign ownership restriction on banks and financial asset management companies will be removed;
• foreign banks will be allowed to set up branch banks and subsidiary banks simultaneously;
• foreign ownership restriction on security companies, fund management companies, futures companies, and life insurance companies will be released to 51 per cent, and fully removed after three years;
• qualified foreign investors will be allowed to invest in insurance agency and insurance loss adjustor business; and
• China will remove the business scope limitation on foreign invested insurance brokers (which currently are only allowed to conduct brokerage for insurance of large scale commercial risks, reinsurance, international marine, aviation, and transport insurance and related reinsurance), allowing foreign invested insurance brokers and domestic insurance brokers to compete on equal footing.  

By end of 2018, among others:

• Trust business, financial leasing, auto finance, currency brokerage and consumer finance will be open to foreign investment;
• no foreign ownership restriction will apply to financial assets investment companies and wealth management companies set up by commercial banks;
• business of foreign invested banks will be significantly expanded; and
• the “two-year representative office’ requirement will be no longer required to set up foreign invested insurance companies in China.