Changes in financial sector show that opening-up is accelerating

At the opening ceremony of the World Economic Forum's Annual Meeting of the New Champions 2019, also known as Summer Davos, in Dalian, Liaoning province on Tuesday, Premier Li Keqiang reaffirmed China's commitment to further open up the economy to foreign investment. 21st Century Business Herald comments:

In his address, Li said China will unswervingly promote all-round opening-up and strive to develop an open economy at a higher level, and along with taking practical measures to deepen the opening-up of manufacturing, finance and other modern services, it will steadily advance the reform of the exchange rate formation mechanism and the convertibility of capital accounts, further reduce the overall tariff level, improve the legal system of opening-up, and make greater efforts to protect intellectual property rights.

China's new round of financial opening-up actually began last year. On April 10, 2018, President Xi Jinping announced at the Bo'ao Forum for Asia that the country's financial sector would be opened up as early as possible. Soon afterwards, Yi Gang, governor of China's central bank, announced specific measures and the timetable for opening up the financial sector to the outside world. Since April 2018, measures to open China's financial sector have been implemented at a faster pace, including easing restrictions on the proportion of equity stakes in the banks, securities and insurance companies, and issuing a shorter negative list for foreign investment.

In March this year, Yi announced a series of new policies by the end of this year to promote financial openness, including encouraging the introduction of foreign capital in the banking and financial sectors such as trusts, financial leasing, auto finance, currency brokerage and consumer finance. Also, no upper limit will be set on the foreign ownership of financial asset investment companies and wealth management companies newly established by commercial banks.

Accelerated opening-up of its financial and services sectors not only conforms to China's commitments made on its entry to the World Trade Organization, but also offers a high-quality financial system needed to support higher quality development. In the past few years, China has strengthened financial regulation and pushed forward the supply-side structural reform of the financial sector, laying a solid foundation for the sector's opening-up. China should also attach importance to matching its financial regulatory capacity with financial openness to avoid importing financial risks.

A series of financial opening-up policies adopted ahead of schedule can show that China's opening-up pace will not stop, but only accelerate. Against the backdrop of protectionism, unilateralism and rising trade and investment disputes, China's efforts demonstrate its determination to develop an open and higher-level economy.