It will allow easier entry for insurance-related businesses.
China's initiative to open up its financial sector will remove caps on foreign shareholding ratios in domestic banks and financial asset management companies. With this, foreign-funded banks can enter China more easily and expand substantially as they are allowed to establish both branches and subsidiaries, an EY report noted.
According to the accounting firm’s report, the initiative allows qualified foreign investors to run insurance agency and insurance assessment businesses in China. It will also slash the required two-year representative office presence prior to the establishment of a foreign insurance company.
In April, the Chinese Banking and Insurance Regulatory Commission (CBIRC) published the document regarding the initiative together with two more documents related to insurance businesses by foreign-funded banks. The central bank governor Yi Gang had earlier announced its liberalization measures with a timetable to relax restrictions in the country’s financial market.
“Release of the opening-up initiative marks an efficient and active response to the new propositions set forth at the BOAO Forum for Asia as well as President Xi’s appeal to ensure quicker implementation of the previously announced major opening-up measures and endeavor to bring the benefits of China’s opening-up to global enterprises and people as early as practicable,” EY noted.
China is the second largest foreign direct investment hub, next to the US.
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