Goldman Sachs Group praised the Chinese move, saying, “We welcome today’s announcement and look forward to playing a greater role in China’s capital markets.”
China keeps tight limits on a number of industries it considers vital, including energy, transportation, the media and financial services. Companies in the United States, Europe and Japan have increasingly complained about being limited in those markets or shut out entirely, even as Chinese companies make their own investments in similar industries outside its borders. In many cases, Beijing’s limits have given rise to Chinese giants who dominate markets at home.
Officials in Beijing had previously said the government would open the financial sector to outside money, but Friday’s move offered the first concrete details.
Zhu Guangyao, China’s vice finance minister, said that his country would start allowing foreign investors to own 51 percent of Chinese securities firms, fund managers and futures companies, and would allow them to own 100 percent three years from now. The current limit on foreign ownership is 25 percent for large, publicly traded securities firms and 49 percent for most other businesses in these categories.
Mr. Zhu said that China would also raise the allowed foreign investment in insurance companies, currently 50 percent for most companies, to 51 percent in three years and 100 percent in five years. China also plans to eliminate its current limit of 25 percent foreign ownership in banks, Mr. Zhu said, but he did not say when it might happen.
While the moves were announced several hours after Mr. Trump and his advisers flew to Vietnam, Mr. Zhu said that the initiatives were the result of decisions made during the Communist Party’s congress last month. Trump administration officials shied away from making commitments while in Beijing over market access, the sort of horse-trading that marked previous presidential visits. They have also been distracted by domestic issues and other trade issues.
Some international banking acumen may be welcome in China. The country’s state-controlled banking system has lent heavily to state-owned companies and affiliates of local governments, leading to vast piles of debt accumulated in a short amount of time. Meanwhile, some smaller businesses continue to complain about lack of access to money. Increased competition could spur state-owned banks to improve their lending decisions.
“Speaking over all, it is a good thing,” said…