Shanghai finance sector poised for more opening-up

Policies cover extensive range of activities to widen market access

Local administrators in Shanghai said they are planning to roll out more projects responding to the central government's financial opening-up policies later this year, especially in the China (Shanghai) Pilot Free Trade Zone. The new projects follow 23 previously announced policies in the past two months.

Zhang Hong, director of the financial bureau at the Shanghai FTZ, said the opening-up projects will cover banking, securities, funds, insurance, credit ratings and third-party payments, especially within the FTZ.

"The specific business operations will include newly established financial institutions, financial license applications from existing institutions, increased foreign ownership and expanding businesses' scope," she said.

So far, the Shanghai FTZ's financial bureau has received applications from institutions based in the United States, the United Kingdom, France, Germany, Switzerland and Singapore. Financial institutions based in countries participating in the Belt and Road Initiative, such as Turkey and Jordan, have also submitted applications.

Yi Gang, governor of China's central bank, announced a total of 12 opening-up policies in the financial sector on April 11, including lifting the limit on foreign ownership in banks and financial asset management companies; gradually eliminating the limit on foreign ownership in securities, futures and life insurance companies; and opening up more business areas to foreign insurance agencies.

In mid-May, the Shanghai Financial Services Office announced its plan for financial opening-up, which touches on banking, securities, insurance, financial markets, free trade accounts, bank-card clearing institutions and nonbank payment institutions.

Zheng Yang, director of the office, said at a news conference on Thursday that financial opening-up projects will likely launch in two batches in the second half of this year.

During the news conference on Thursday, Sun Hui, deputy director of the People's Bank of China Shanghai Head Office, said that one of their major tasks in the near future will be to complete and explore the function of free trade accounts.

Pei Guang, director of the Shanghai Insurance Regulatory Commission, said that the commission will launch the trial of catastrophe bonds and optimize offshore insurance services in Shanghai.

Foreign financial institutions have welcomed local administrators' actions and said they foresee further changes.

Lu Jing, vice-governor of Standard Chartered China, said that the bank has made a number of applications regarding the financial opening-up policies, including license applications.

On April 27, London-headquartered risk management and insurance intermediary Willis Towers Watson obtained approval to expand its business scope in Shanghai. It was the first company of its kind to do so in the city. The insurer's China General Manager Xu Huizhi said that the company will announce a specific plan after its third-quarter board meeting.

Rong Honggang, general manager of JLT Insurance Brokers in China, said that as the financial sector further opens up, the company will be better able to reach small and medium-sized enterprises and high net worth individuals in the country.