China drops restrictions on foreign investment in insurance and banking firms, moves closer to deal with EU

The international risk management and insurance community appears to be one of the potential beneficiaries of the recent slight thawing in the China-US trade war and improving relations with the EU, as the Chinese State Council confirmed that it has decided to further open up its insurance and banking sectors to foreign investors by revising related regulations. Meanwhile, Chinese state councillor and foreign minister Wang Yi told French news service AFP in Paris this week that he is confident of reaching an investment deal with the EU. Chinese news service Xinhuanet reported that the decision regarding revisions to the regulations on management of foreign-invested insurance and banking firms has been authorised by the State Council and will be implemented immediately on the date of their release. The revisions are aimed at providing a better legal guarantee to opening up the country's insurance and banking sectors to overseas investors, and include improving the supervision over foreign banks' local branches and lifting previous restrictions on company establishment, shareholder status and business expansion, explained the state-owned news agency. Foreign insurance groups will now be allowed to set up foreign-funded insurance firms on the Chinese mainland, while overseas financial institutions can also be shareholders of foreign-funded insurance firms. In the banking sector, foreign players can establish branches and wholly foreign-owned banks at the same time on the Chinese mainland, as well as setting up branches and Sino-foreign joint ventures simultaneously. The country's securities regulator also recently announced a clear timetable for allowing full foreign ownership of financial service companies covering the fund management, brokerage and futures sectors. Meanwhile, during the recent lull in the China-US trade spat, the EU and China appear to be making some progress of their own. In an interview with AFP during his visit to France on Monday, foreign minister Mr Wang said China and EU are each other's largest trade and economic partner, and both hope that economic and trade cooperation will become more standardised and law-based. He said China holds a “positive attitude” towards the signing of a comprehensive investment agreement with EU, according to Xinhuanet. Mr Wang reportedly said China and the EU are in different development stages, therefore the two sides should reach a mutually beneficial and win-win agreement based on their respective national situations and needs, instead of trying to impose their own demands on each other. According to the minister, China's door will only open wider and the thresholds of market access will be lower. Mr Wang said the leaders of both sides reached a consensus during their meeting this year that decisive progress in the negotiations should be made by the end of the year, in a bid to reach a high-level deal next year. And this is not only a consensus but also a commitment made by both sides. He also reportedly said China is also ready to launch free-trade agreement negotiations with the EU as soon as possible, or at least to start feasibility studies. Mr Wang added that China's opening up will not stop. It will offer better investment environment for foreign enterprises, including those from the EU, and China hopes the EU will do the same.

China drops restrictions on foreign investment in insurance and banking firms, moves closer to deal with EU

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