China forges ahead with opening financial markets
(15 December 2017 – China) China will relax restrictions on foreign banks seeking to conduct yuan trading, removing an eligibility requirement that stipulated foreign banks needed to be operating in-country for one year, according to the nation’s top banking regulator.
The rule change will allow foreign banks to begin yuan trading upon setting up in China, a significant relaxation that reflects Beijing’s effort to push ahead with financial opening.
The waiting period was trimmed to one year from three years in January 2015, following complaints from foreign banks that the restrictions were blocking their growth in China.
The one-year waiting period was among the policies that would be scrapped, the China Banking Regulatory Commission (CBRC) said in a statement on its website on Wednesday.
The CBRC also said it will supports foreign banks to conduct government bond trading.
But the financial regulator did not provide a timetable for when the change will take effect, noting instead that the revision will involve the amendment of rules and regulations.
Last month, deputy minister of finance, Zhu Guangyao announced a raft of financial opening measures.
“The CBRC statement showed China is acting on its financial open-up pledge step by step,” said Xu Wenbing, the chief banking analyst at Bank of Communications in Shanghai.
At the end of 2016, foreign banks had set up 39 locally incorporated subsidiaries and 166 representative offices among 1,031 outlets in 70 mainland cities, according to the CBRC. They currently account for less than two percent of China’s banking assets.