In a joint conference in London last week, Britain’s chancellor of the exchequer Philip Hammond and Chinese vice premier Ma Kai revealed that Beijing is planning to loosen its grip on stringent foreign ownership rules by allowing foreigners to hold controlling stakes in domestic financial firms.
Under the current rules, foreign investors are permitted to hold 50% of life insurance companies and a 49% stake in mainland mutual fund and securities brokerages.
Although China stopped short of specifying when the limit would be raised or by how much, if implemented, it could be considered a ‘game-changer’ for life companies and asset managers looking to gain more clout in their mainland ventures.
"China commits to gradually raise the permitted equity holding of qualified foreign financial institutions in securities and mutual fund companies," said Hammond and Kai after their trade meeting on Thursday.
They added that the China Insurance Regulatory Commission (Circ) was "willing to work towards increasing foreign ownership of life insurance companies conducting business in China”.
The announcement follows a more general relaxing of Chinese restrictions on Sino-foreign joint ventures, underpinned by moves to create more channels for foreigners to buy Chinese stocks, bonds and launch fund products onshore.