China to cut red tape for foreign lenders

Source: Xinhua | 2017-12-29

CHINA’S banking regulator has issued draft measures for amending its licensing and oversight of some foreign-funded bank activities, a move it says is aimed at promoting investment in the country’s fast growing financial sector.

In a statement yesterday, the China Banking Regulatory Commission said it is preparing to implement amended administrative measures to “standardize market access” for foreign lenders, and cut red tape to create a level playing field for such activities as branch openings, debt fundraising and examination of senior executives.

The CBRC said the amended measures will also put in place procedures “to provide a clear legal basis” for foreign-funded banks to make equity investments in Chinese financial institutions.

A notification system also will be installed for four types of activities, including securities fund custody business and the provision of wealth-management services for foreign customers, the CBRC said.

In October, CBRC Chairman Guo Shuqing said China was preparing to further open up its banking system to foreign investors. The market share of foreign banks in China has fallen to 1.2 percent from 2.4 percent 10 years ago, Guo said, which “is not beneficial for promoting competition.”

In November, Vice Finance Minister Zhu Guangyao said China will hike foreign ownership caps in some joint ventures in futures, securities and funds to 51 percent from 49 percent.