After a month from the opening of China to foreign investors, the first questions have come to the China Securities Regulatory Commission from the international companies that want to develop in China.
After the friction generated by the US duty war on China, the latter decided to take measures to attract more foreign investment. On the one hand, China has pledged to find new foreign funding to develop its new economies, such as the hi-tech industry, and thus become finally independent of foreign products. On the other hand, last month, China amended its legislation to allow foreign companies to hold 51% of the ownership of companies based in China.
Japan’s largest securities trader Nomura, for example, last week became the first foreign player planning to set up a holding firm in China
To hold the 51% of the new firm, Nomura had to submitted applications materials to the China Securities Regulatory Commission (CSRC). After Nomura, also J.P. Morgan Broking (Hong Kong) Limited has decided to apply to the CSRC. The international investment bank USB, meanwhile, this month asked to the CSRC to raise its stakes from 24.99 percent to 51 percent in the joint-venture China-based USB Securities Co.
Yang Changyong, a senior researcher from the Chinese Academy of Macroeconomic Research, said to Xinhua: “These are important signals of China’s financial opening up, showing the country’s great market potential and confidence from global investors”.
Yang continue saying that: “The move is an important step of further opening China’s securities sector to foreign players, and it will bring healthy competition and help introduce mature experiences and expertise from overseas institutions to the domestic industry”.
This opening to foreign markets by China also means significant changes to the Chinese financial system. Indeed, Chinese government said that it will increase quotas that allows domestic investors to access foreign assets.
The quota for the Qualified Domestic Partnership program in Shanghai and the quota for the Qualified Domestic Investment Enterprise program in Shenzhen will be expanded to 5 billion US dollars each
Jing Ulrich, managing director and vice chair of Asia Pacific of J.P. Morgan Chase, said: “The Chinese market has greater appeal day by day. Investors from around the world are moving to add investment here in preparation for opportunities to emerge in the future“.
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