China to lift investment thresholds

Foreign investors' equity will continue to increase and may even reach 100%

BEIJING: China will further open banking and insurance sectors to foreign investors and may even allow foreign institutions to set up wholly owned companies in China, according to the country's top financial regulator on Monday.

Foreign investors' proportion of equity will continue to increase, exceeding 51% in banks and insurance companies, and may even reach 100%, said Guo Shuqing, People's Bank of China's Party Secretary and head of the China Banking and Insurance Regulatory Commission, said in an interview with China Central Television.

"We hope more foreign companies, especially well-performing and world-famous institutional investors, will come to China," he said, pledging fair treatment for foreign companies.

One of the key priorities this year is to accelerate the development of direct financing and the capital market, and to strengthen the capital market's capacity to promote economic growth, said Guo.

The top financial regulator also said in the interview that China will further open the financial and insurance sectors.

Any speculative activity in relation to the Chinese renminbi will "inevitably suffer a huge loss", according to Guo, who said short-term volatility of the currency is normal.

China will continually push forward supply-side structural reform in the financial sector, and strengthen financial support for the real economy, Guo added.

Profits of China's industrial firms fell in April by 3.7% year-on-year to 515.4 billion yuan ($74.8 billion) due to overall economic weakening, the high base effect and reduced demand after companies rushed to buy industrial goods to benefit from the country's value added tax cut, which started from April 1.

The fall will put more pressure on policymakers to step up support for the economy, and economists said China may need to take short and long-term measures to stimulate its economy.

This article originally appeared on the China Economic Net