China to Widen its Foreign Access

China is raising its foreign ownership limits in financial firms in a step for granting access to a tantalizing multi-trillion dollar financial services market, as the world’s second-biggest economy seeks position itself to be the major global finance hub.

China is raising its foreign ownership limits in financial firms.

On Friday, Vice Finance Minister Zhu Guangyao announced the move, a day after U.S. President Donald Trump repeatedly asked for a better access to Chinese markets in meetings with the Chinese President Xi Jinping.

President Xi would be directing the broad economic reforms by opening up its country capital markets, seeking for technical knowledge through tracking down the massive inbound and outbound investments, and internationalizing the Yuan currency.

Some of the newest changes include raising the limit on foreign ownership in joint venture firms involved in the futures, securities, and funds markets to 51 percent form its current, which is 49 percent. These latest changes will be effective immediately, followed by the drafting of specific related rules.

According to Zhu’s statement in a news conference. China is already conveying a timetable and a roadmap for financial sector reform and opening up.

"Financial services further opening definitely has been high on our list," the President of American Chamber of Commerce in Shanghai, Ken Jarrett, stated.

"It's a step in the right direction. We'll have to see the detailed rules. In China you always have to pay attention to the fine print to see how quickly it moves, but to finally ease up on the cap is something that is welcome."

A Shanghai-based consultant for the fund industry sees the Friday's declaration as a measured step towards bigger changes down the road.

"This is part of a methodical and deliberate process. We fully expect foreign asset managers at some point in the next several years to have full control of their own ventures." said the consultant.

The plan was to ease the ownership restrictions, and it comes as Beijing is facing a huge amount of pressure from Western governments and business lobbies that want to remove the investment barriers and onerous regulations that restrict overseas companies' operations in its markets.

During the trip of President Trump in Beijing this week, Trump stated that the trade between the two nations was unfair, and called for greater market access for U.S. companies.

"We really have to look at access, forced technology transfer, and the theft of intellectual property, which just, by and of itself, is costing the United States and its companies at least $300 billion a year," Trump held.

"Both the United States and China will have a more prosperous future if we can achieve a level economic playing field. Right now, unfortunately, it is a very one-sided and unfair one." 



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