China promises to open financial sector

China has announced plans to ease limits on foreign ownership of financial services groups, following years of complaints that such restrictions block foreign groups’ development in the country. The government will relax or eliminate ownership limits in commercial banking, securities, futures, asset management and insurance, vice-minister of finance Zhu Guangyao said in Beijing on Friday. According to the Financial Times, China has used joint venture requirements and ownership caps in a broad range of industries to protect domestic groups from competition and induce sharing of foreign technology and management expertise with local partners. “Symbolically, this is a very important move. It shows that after the 19th party congress, the new leadership is still committed to financial liberalisation and opening up,” said Jianguang Shen, chief economist at Mizuho Securities Asia in Hong Kong. “This can also alleviate pressure from the US government. Financial services is an area where the US has been lobbying China for many years.”