头条英文播报｜Foreign banks, insurers given broader access

Thefurther opening-up of China and the establishment of a fair market environmentwill greatly help to promote full competition in the Chinese banking and insurancesectors. [Photo/VCG]

China is further opening up its financialsectors to foreign investors by loosening regulatory requirements and liftingbusiness restrictions on foreign banks and insurance companies.

The State Council announced the revision ofregulations on foreign banks and insurers on Tuesday. China relaxed marketaccess rules for foreign insurance companies, such as removing requirements thatcompanies that apply to establish foreign-invested insurers in China have atrack record in the business of over 30 years and have a representative officein the country longer than two years.

The government also liberalizedrequirements on stakeholders that plan to set up foreign-invested banks inChina and requirements on foreign banks that plan branches in the country.

Other revisions include allowing foreignbanks to simultaneously set up branches as well as wholly foreign-owned banks —or branches and Sino-foreign joint venture banks — in China. Also allowed isexpanding the business scope of foreign banks by lowering their branches'threshold of fixed-term renminbi deposits to 500,000 yuan from ­1 million (to$70,610 from $141,220) per deposit.

"Revisions of the banking andinsurance regulations will attract more market participants in both sectors,stimulate market vitality, push Chinese and foreign-invested financialinstitutions to improve their competitiveness and benefit China in regard of learningfrom advanced international ideas and experience," Liu Fushou, chieflawyer of the China Banking and Insurance Regulatory Commission, said at a newsconference on Tuesday.

He said the China Banking and InsuranceRegulatory Commission will publish detailed implementation measures as soon aspossible.

"The further opening-up of China andthe establishment of a fair market environment will greatly help to promotefull competition in the Chinese banking and insurance sectors, optimize theshareholding structure of related financial institutions, regulate shareholderbehavior and form a rational and diversified market system," Liu said.

The new rules will provide more developmentroom for smaller foreign banks, which have their own expertise in specializedareas, in China, he added.

The move received warm responses frominternational financial institutions. Jerry Zhang, executive vice-chairman andCEO of Standard Chartered Bank (China) Ltd, said: "The new regulationswill greatly relax requirements for foreign banks to enter the China market andexpand the business scope of foreign banks. This is a huge inspiration toforeign banks, including Standard Chartered, and it will send a highly positivesignal to global financial institutions and institutional investors."

CG Lai, CEO of BNP Paribas China Ltd, said:"The development is another positive step for China's financial marketliberalization agenda. Foreign banks can continue to contribute to the overalldevelopment and deepening of China's market infrastructure and the expansion ofglobal networks for clients, as well as a broader suite of products."

A senior executive officer of Mizuho Bank(China) Ltd said in a written note that the policies "will have positiveeffects on foreign banks in terms of their expansion of investments andbusiness operations in China. It will provide opportunities … for betterdevelopment of foreign banks in the country".

Statistics from the banking and insuranceregulator show that the assets of foreign banks and foreign insurers in Chinaaccounted for 1.64 percent and 6.36 percent, respectively, of the total assetsof the Chinese banking and insurance sectors.

By the end of the second quarter, foreignbanks had set up 41 locally incorporated foreign-invested banks, 116 branchesand 151 representative offices in China. Foreign insurers had established 59locally incorporated foreign insurers and 131 representative offices in thecountry.

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