THE government has given the go-ahead for two more overseas financial institutions to set up local subsidiaries, China’s banking and insurance regulator said in a notice yesterday, bringing the total number of approvals to 12. Germany’s Allianz Group will be permitted to establish China’s first foreign insurance holding company, and Hong Kong-based Chiyu Bank has been approved to set up a branch in Shenzhen, the China Banking and Insurance Regulatory Commission (CBIRC) said. The regulator said it would “steadily expand” the opening up of China’s financial sector, while at the same time improve its risk prevention and supervision capabilities. Allianz chief executive Oliver Bate said in a statement that the move was a “significant milestone” and the group expected the holding company to be established in 2019. Chinese President Xi Jinping said in Shanghai earlier this month that China would work to broaden market access for foreign players while boosting imports and strengthening intellectual property rights. The banking regulator said it has recently given the go-ahead for Fubon Bank, ICBC-AXA Assurance and the Korean Reinsurance to set up local units. The regulator issued draft guidelines late last year to help promote foreign investment in the financial sector, cutting red tape and creating a level playing field for foreign institutions to set up branches, raise debt and hire senior executives. China earlier this year announced it would allow 51-percent foreign ownership of brokerages and life insurers, with that cap to be removed by 2021. Ownership curbs were also to be eased in other financial industries including banking. Stakes were previously capped at 20-percent for a single foreign institution and 25 percent for a group. Earlier this year, the regulator published revisions to regulations in line with the government’s plans to ease restrictions on foreign investment in the country’s financial sector. Overseas financial institutions will be treated the same as local companies, the banking and insurance regulator said. Foreign banks held 2.9 trillion yuan ($420 billion) of assets in China at the end of 2016, some 1.3 percent of the total and the lowest share since 2003, CBIRC data show. They earned 12.8 billion yuan in the nation last year, less than 1 percent of the profits at Chinese counterparts.(SD-Agencies) |