By Liu Zhiqin Source: CGTN Published: 2018-4-29
President Xi Jinping has announced in his keynote speech in Boao Forum for Asia that China would further open up its market, particularly in the banking and insurance sector.
Recently China Banking and Insurance Regulatory Commission (CBIRC) issued a list of new measures to promote the reform and opening up in these areas.
Three prominent points need to be noted in the new measures:
Firstly, the deepening of reform is very unique. The new regulations include no limit on the percentage of share ownership for foreign investors to join in Chinese banking entities, that is to say, foreign investors will be allowed to become the majority of one bank in China. This is a big step and huge progress in China’s economic reform.
Secondly, the scope of the business for foreign investors is wider than the market expected. All foreign investors that qualify for the requirements will be allowed to execute most kinds of businesses such as checks, bills, bonds, and invoices.
Beyond these procedures, asset management and wealth are also included in the business ranges, which provides more channels and chances for foreign investors to make more profit during operations.
Finally, it will be possible for foreign investors to provide their services directly to the local people and Chinese enterprises which will have a significant impact on the Chinese economy.
All these new measures have sent a strong message to the world that China will firmly promote the campaigns of reform and opening up further in the years to come.
All these actions have shown the self-confidence of China in its policy, its capability and its ability to deal with all possible risks that may occur in the reform process.
I believe that these measures to further open up China’s financial market will positively impact the domestic and international markets in the short term and long term.
In the short term, it will definitely provide heavy pressure on Chinese financial entities.
They`ve been talking about “the wolf is coming” for a long time. Now when “the wolf” is really standing outside the door, China must open the door and welcome “the wolf” as a VIP guest, which has made many Chinese bankers nervous and depressed.
It will take a long time for those Chinese partners to get used to working together with those “wolves”. The institutional changes and even the working styles may have great differences for the Chinese side to coordinate properly and smoothly.
The top priority is how to control risks during future operations for both sides; this is the toughest goal for all participants in such a “game”.
However, this is only a short pain that China has to overcome.
But in the long run, China must see opportunities and challenges both exist in the meantime. It will provide more promising chances to the international market with a huge development potential for China.
With the development of the Belt and Road Initiative, China will need strong financial support and prudent monetary policies to safeguard the real economy and help realize the Chinese Dream, building China towards a strong and prosperous country by 2050.
The further measures in China’s financial market will reshape the present global financial map in two ways: One is an open market represented by China and the other one is a closed market represented by the US. The two pictures have shown the different outcomes from each.
China represents a promising and shared future of mankind, and the US is trying to pull the time back to its origin to remain as the soul pole of the world. This is a self-lonely shared economy, not the common destination of all nations.
China’s financial market is an undiscovered treasure attracting millions of ventures who are willing to find more opportunities to explore a positive future.
Foreign bankers have rich experience and knowledge in managing and operating loans, trust, lending, auto leasing, broker, money brokerage, consumer financial service and insurance intermediate activities that can contribute greatly to improving the basic economy and the quality of life, thus I am very convinced and confident to strive for an equal and bright future on both sides !
Liu Zhiqin is a senior fellow of Chongyang Institute for Financial Studies at Renmin University of China.