Until now, foreign banks were obliged to partner with locals and could not own more than 49% of the capital of the companies they had to establish. This announcement may appear as a gesture of goodwill from China with U.S when the two countries plan to sign a preliminary trade agreement in January, according to Washington.
According to Donald Trump, president of U.S, will sign a partial trade agreement on January 15. “I will sign our great and complete phase one trade agreement with China,” Trump said. The agreement includes advances in the forced transfer of technology, as well as better access to the Chinese market for companies in the financial sector.
The first two economies of the planet have been waging an unarmed trade war since March 2018, which has resulted in the introduction of mutual tariffs that affect billions of dollars in trade.
Beijing had long been promising to open its economy to foreign investments, but was reluctant to do so in the financial sector.
In October, China released a timetable for the removal of several restrictions and in December, the Swiss bank UBS was authorized to acquire a majority stake in its activities in the country.
It is the reference type for loans from the People’s Bank of China
From January 1, foreign companies specializing in term contracts can invest in China without limits on the amount of capital.
Fund management companies may benefit from this measure as of April 1 and brokers as of December 1, 2020.