Includes special features of this country’s banking system and rules/laws that might impact U.S. business.
Last Published: 7/30/2019

China’s 13th Five Year Plan for the Finance Sector
 
Opening of Chinese Financial Market
In April 2019 at the Boao Forum, Yi Gang, Governor of People’s Bank of China, announced the following measures, which have since been implemented:

  • Eliminating the requirement for having at least one domestic securities firm among Chinese partners in a joint venture securities firm
    1. This is in the process of being implemented.
  • Quadrupling, as of May 1, 2019, the quota for mainland-Hong Kong stock link to 52 bn RMB ($8.3 bn) northbound and 42 bn yuan southbound;
  • Allowing qualified foreign investors to start insurance agent and adjuster businesses
    1. This was implemented in June 2018.
  • Opening up the business scopes of foreign insurers allowing equal access as domestic insurers
    1. This was implemented.
  • Encouraging foreign investment in trust, financial leasing, auto financing, currency brokerage, and consumer financing;
  • Setting zero foreign equity cap on new financial asset investment firms and wealth management firms set up by commercial banks
    1. This has not yet been completely eliminated.
    2. The foreign equity cap was raised to 51%. Foreign firms have considered expanding but none have been approved.
  • Completely removing the pre-establishment two-year operation requirement for foreign insurers. In addition, a London-Shanghai stock link will be launched by the end of the year.
The following measures were announced at the 2018 Boao Forum but have not been fully implemented at the time of publication:
  • Giving national treatment for foreign banks and financial asset management firms by eliminating equity restrictions and allowing foreign banks to set up branches and subsidiaries at the same time by the end of 2018
  • Raising equity restrictions for foreign securities, fund management, futures, and life insurance firms to 51% and eliminating the restrictions by 2021;
  • Eliminating any business scope restrictions on joint venture securities firms in alignment with those for domestic firms. 
In May 2019, CBIRC Chairman Guo Shuqing announced 12 new opening up measures in the financial sector.  The measures have not yet been implemented:
  1. Upper equity limits for a single Chinese-funded bank and a single foreign-funded bank in a Chinese commercial bank will be abolished;
  2. Requirements will be abolished for foreign banks to have $ 10 billion in assets before being allowed to set up a legal entity in China and for foreign banks to have $ 20 billion in assets before being able to set up a branch in China;
  3. Requirement will be abolished for foreign financial institutions to have $ 1 billion in assets before being allowed to invest in a trust company;
  4. Foreign financial institutions will be allowed to invest in foreign-funded insurance firms operating in China;
  5. Requirements will be abolished for foreign insurance brokerage companies to run insurance brokerage business at least 30 years in China and with total assets of no less than $ 200 million;
  6. Requirement will be abolished that the only Chinese or major shareholder of a Chinese-foreign joint venture bank must be a financial institution;
  7. Foreign financial institutions and banking insurance institutions controlled by private capitals will be encouraged to launch equity, business and technology cooperation;
  8. Foreign insurance groups will be allowed to invest and set up insurance institutions;
  9. Domestic foreign insurance groups will be allowed to set up insurance institutions according to the same qualification requirement as the Chinese insurance groups;
  10. Market entry requirements will be relaxed for both Chinese and foreign financial institutions to set up consumer finance company;
  11. Foreign banks will not need approval to conduct RMB business and will be able to conduct RMB business when they kick off business;
  12. Foreign banks will be permitted to engage in agency collection and payment service.

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