China’s top banking regulator said on Thursday, October 19, that the country will further open up its banking system to foreign investors, who have failed to make inroads into the highly regulated sector and seen their market share decline.
“We will give foreign banks more space in the form of their establishment, shareholder qualifications, the percentage of their shareholding and their scope of business,” said Guo Shuqing, chairman of the China Banking Regulatory Commission (CBRC) at a news conference during the 19th Party Congress.
The market share of foreign banks in China has decreased to 1.2% now from 2.4% 10 years ago, Guo said.
“This is not beneficial for promoting competition and structure optimisation,” he said.
Guo’s comments are the latest indication that the world’s second-biggest economy may lower barriers to overseas participation in its financial services sector, which has frustrated some foreign firms.
The regulator’s comment comes as Beijing faces mounting pressure from Western governments and business lobbies to remove investment restrictions and onerous regulations that prevent foreign firms from operating in its markets.
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