Foreign firms ready to enter financial market

Several well-known foreign investors are ready to enter the Chinese financial market, a swift response to the country's vow to accelerate opening-up and the reflection of an optimistic outlook on the stability of the world's second-largest economy, according to central bank officials.

The People's Bank of China, the central bank, told China Daily on Thursday that it has received the first application from a foreign payment company to enter the country's booming third-party payment industry.

The application was submitted by a UK-registered international foreign exchange service provider, WorldFirst, only three weeks after President Xi Jinping's announcement of the launch of a group of landmark measures this year targeting broader market access for foreign investors in the financial sector.

The central bank also confirmed a separate application from Experian, a provider of consumer and business credit reporting based in Dublin, Ireland, which wants to offer corporate credit information services within China.

"We have received the applications and will consider the registration in accordance with the law," said a spokesperson for the central bank, believing the foreign participants will contribute to long-term and sustainable development of the financial system.

The moves are being seen as a signal of accelerated financial opening-up, with the central bank already listing specific measures and a corresponding timetable last month.

More policies are on the way, including moves to eliminate limits on foreign ownership for financial asset investment and wealth management companies set up by commercial banks, which is planned to take effect by the end of the year.

Nonbank payment and credit information services became priorities chosen by the top financial regulator to fulfill its promise, with analysts' expectation that the foreigners' entrance is not likely to disrupt the existing industry structure in terms of market share, but to encourage competition and stimulate innovation.

The financial watchdogs, meanwhile, pledged to apply in "an equal manner prudential regulation" to domestic and foreign market participants of all types of ownership, to secure a smooth opening process, defuse risks and maintain stability.

"Weighing all the pros and cons, foreign investors may have greater incentive to develop asset management and investment banking services in China, compared with capital-intensive businesses including banking and insurance," said Wang Yaoping, an analyst with CITIC Securities.

Clearly, the foreign companies have disadvantages in competition with Chinese commercial banks and insurance giants who are more knowledgeable about domestic clients' needs, according to Wang.

They may prefer setting up joint ventures as a path to the core of the financial sector, the analyst said.

Statistics from the central bank showed that in 2017, domestic payment institutions have processed 169 trillion yuan ($26.6 trillion), up from 18 trillion yuan five years earlier, with an annual growth rate of 75 percent. About 105.1 trillion yuan was transferred through the mobile payment service of third-party payment companies last year, a year-on-year growth of 106.1 percent.