Chinese market will entice UK financial services

China's move to further open up its financial industry will help major banks and fund managers in the United Kingdom find new markets after Brexit.

The UK is planning to leave the European Union in March 2019 and could lose its dominate role as the bloc's main financial services provider.

Already, it is unclear whether the City of London will retain unfettered entry to EU countries and businesses.

But those fears might be offset by China's decision to give major global investment banks and insurance companies unprecedented access to the world's second-largest economy.

Earlier this month, it was announced that foreign financial firms would be allowed to own up to 51 percent in local fund managers, securities ventures and futures brokerages from the current 49 percent.

This will be for a three-year period with a "no limit" clause kicking in after that.

"UK firms fearing a loss of access to the EU after Brexit are likely to be interested in these plans," said Ben Robinson, a senior economist at the London-based think tank Official Monetary and Financial Institutions Forum.

International financial players, including JP Morgan Asset Management, Standard Life Aberdeen Plc, UBS, HSBC Holdings Plc and Goldman Sachs, have welcomed the decision and confirmed their interest in China.

UBS revealed it would continue to grow its joint venture business in the country.

"Other financial market developments in China, including the expansion of financial products, as well as the inclusion of Chinese A-shares into the MSCI next year, are likely to tempt asset managers and investment firms," Robinson added.

MSCI, the US index provider, will add Chinese stocks to its emerging markets index in June. Overseas funds tracking the MSCI as a benchmark are expected to buy more Chinese stocks.

The country's new policy announcements were made by Zhu Guangyao, deputy finance minister on Nov 10. It came after the 19th National Congress of the Communist Party of China, where Chinese leaders set out their long-term strategic vision for the nation.

"China is committed to realizing its destiny as an economic and financial key player," said Jan Dehn, head of research at Ashmore Investment Management.

He also believed that London's banks and asset managers would "offer real added value in the China market."

Dehn pointed to China's large saving base, which global banks and asset managers are keen to tap into once Beijing confirms a timetable for the regulatory changes.

"This could provide a second opportunity for foreign firms to grow their market share," said Etelka Bogardi, a partner at the law firm Norton Rose Fulbright.

Bogardi added that new competition in China will also encourage domestic financial companies to update their governance standards in line with international norms.