On July 20, China announced 11 opening measures for its financial services industry. While they have been portrayed in the media as game-changing, very few of the openings are in sectors that US financial services companies are interested in. For those measures in sectors of interest, the reforms could lead to real openings only if China removes the underlying regulations and requirements that ultimately act as barriers to entry.
China Market Intelligence
In anticipation of further openings, global asset managers, who still represent a small share of China’s market, have begun engaging with local regulators and searching for potential partners.
In meetings over the past week, the US-China Business Council (USCBC) met in Beijing and Shanghai with senior representatives from the National People’s Congress Legislative Working Committee, which is responsible for drafting the Foreign Investment Law, to discuss USCBC’s recommendations.
The Belt and Road Initiative (BRI) may face mild competition from US and EU alternatives.
Foreign holdings of bonds have increased in response to changes China has made to improve the standards of its bond credit rating industry and increase regulatory scrutiny of its bond market.
Jacob Parker, US-China Business Council (USCBC) vice president for China operations, last week led a
US companies are looking at potential opportunities in China’s island province of Hainan—a historically tourism-driven economy that is promoting further openings to foreign business as part of its new status as a free trade zone (FTZ).
Recent reforms to the operations of the Committee on Foreign Investment in the United States (CFIUS) removed some of the controversial elements of earlier proposed versions, but strengthened and expanded the scope of CFIUS authority to review foreign transactions and tightens the export controls process.
China recently issued two revised lists of restricted sectors for foreign investment: one applying nationwide, and a second list with additional openings applying only to free trade zones (FTZs).