Status to not change for China's banks with overseas investments

China's banking and insurance regulator clarified that the institutional status of Chinese banking institutions will remain unchanged after they receive investments from overseas financial institutions.

It means that the regulations for such banking institutions will remain the same in many aspects, including market access, business scope and geographical area of operation, unaffected by their foreign investors. The relevant banking institutions will not be regulated as wholly foreign-owned banks or joint ventures, according to the regulator.

In this way, the China Banking and Insurance Regulatory Commission will create a fair, open and transparent regulatory system for both Chinese and foreign investors in China’s banking sector, by maintaining the stability and continuity of regulations, said the regulator in a statement posted on its website on Friday.

To promote the implementation of policies to further open up China's banking sector as soon as possible, the regulator is soliciting public opinions on a decision to abolish and revise certain regulations on Chinese financial institutions, such as removing the cap on foreign ownership of Chinese banks and asset management companies.

The regulatory decision also made clear that foreign investors should abide by the current and future basic laws on foreign investment in China. During the process of largely expanding market access to foreign investors, the country’s macroeconomic administrators and financial regulators will keep improving institutional construction, such as promoting the establishment of a prudential regulation mechanism and supplementary measures, to protect international economic safety, the regulator said.