China begins to lift restrictions on foreign investment

BEIJING: China has begun to lift important restrictions foreign investment in its financial sector, a movement demanded by the United States for a long time since the two largest economies in the world are locked in fierce trade battle .

Since early 2020, foreign banks can now establish wholly-owned branches in China without a local partner that owns the majority stake, the banking regulatory authority, CBIRC, announced Friday.

In the past, foreign banks were required to have a local Chinese partner and were not allowed to have more than 49 percent of their respective joint ventures.

The announcement could be seen as a gesture of goodwill from China to the United States, as Washington says a preliminary trade agreement between the two sides seems to be signed this month.

The world's two major economies have been waging a ruthless trade war since March 2018, resulting in mutual tariffs applied to hundreds of billions of dollars in annual trade.

Beijing has long promised to further open up its economy to foreign investment , but it was slow to do so in the financial sector.

In October, China released a calendar to lift a series of restrictions.

And in December, the Swiss bank UBS was authorized to take a majority stake in its activities in the country.

But as of January 1, foreign companies specializing in futures contracts can now invest in China without limits on the amount of capital withheld.

The fund management companies will be able to do it as of April 1 and the brokers as of December 1, 2020.

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