On 10 November 2017, the State Council Information Office of the PRC held a briefing to discuss the economic outcome resulting from the Beijing meeting between the Chinese and US Presidents. The consensus reached by the two government leaders include that in order to implement the initiatives put forth at the 19th National People’s Congress, China will liberalise the foreign ownership limits for institutions in the financial services sectors. The detailed implementation rules or regulations are expected to be issued in due course with the implementation date announced then. Meanwhile, here is a summary of the briefing:
- Foreign investors will be allowed to own as much as 51% equity in securities, fund management and futures companies. The cap will be removed after three years. Assuming implementation follows next year, this means foreign managers may use a WFOE structure to implement their retail strategies in the PRC in 2021.
- Current foreign ownership restrictions in Chinese banks and financial asset management companies will also be relaxed.
- After three years, foreign investors will be allowed to own up to 51% equity in life insurance companies, with the cap removed in five years.