| | | China's Big Bang Moment Opens Banks, Brokers to Foreign Control
(This is the single biggest fundamental News story of 2017----- mark my word .... wait and watch in 18 months)
(the Big Bang in Australia in 1985 that I was there for saw the currency float, initially go up, then collapse over 50% in just 3 or 4 months..... and got them a massively inverted yield curve..... but with China entering
the Major leagues Globally.... It will rout out the mountains of stale debt that is holding back there
economy...JJP, It's also going to create a major boom for banking and financial service jobs and the global banks will have to send all sorts of executives over to help build up local teams.... especially in the capital market operations, derivatives. origination.... make price discovery much more open and transparent and
will ultimately make the system so much stronger...and some fortunes will be made on the volatility and Macro moves to get China in line with other major global free market economies.... this is a huge score for
DJT and for the world as a whole. warning their may be an episode of two of some tough medicine we
have to go through with risk assets but... that is capitalism..... my readers.)
Bloomberg News
November 9, 2017, 11:27 PM EST Updated on November 10, 2017, 12:02 AM EST
China took a major step toward the long-awaited opening of its financial system, removing foreign ownership limits on its banks and asset-management companies, and allowing overseas firms to take majority stakes in local securities ventures and insurers.
Regulators are drafting detailed rules, which will be released soon, Vice Finance Minister Zhu Guangyao said at a briefing in Beijing on Friday. Foreign firms will be allowed to own up to 51 percent in securities ventures and life-insurance companies, caps that will be removed gradually over time, he said.
China’s steps look poised to end years of frustration for foreign banks, who have long been marginal players in Asia’s largest economy. The announcement could be seen as a major win for U.S. President Donald Trump, whose first official visit to China was followed by a string of Sino-U.S. deals.
“This is a milestone in China’s progress of opening up its economy,” said Larry Hu, head of China economics at Macquarie Securities Ltd. in Hong Kong. Announcing this during Trump’s visit shows the world that “China and the U.S. are in a business and trade cooperation rather than confrontation,” Hu said.
On Thursday, China’s Foreign Ministry foreshadowed the latest moves, with a statement saying that entry barriers to sectors such as banking, insurance, securities and funds will be “substantially” eased. Those comments came following a meeting between Trump and his counterpart Xi Jinping.
Read more: The Hurdles Facing Global Firms as China Opens Financial Sector
The moves would be encouraging to foreign banks, asset managers and insurers, who have long been kept on the margins in China, the world’s second-largest economy, by various barriers. Global banks are currently limited to owning 49 percent of local securities joint ventures, frustrating their attempts to compete effectively with Chinese rivals.
That cap was behind JPMorgan Chase & Co.’s move to exit its China venture, as it sought a new structure that would give it more say in decision making.
China has already taken steps to gradually open up its $40 trillion financial sector, including allowing foreign investors greater access to its equities and debt markets through trading links with Hong Kong.
The People’s Bank of China was drafting a package of reforms which would give foreign investors greater access to the financial services industry, people familiar with the matter told Bloomberg in September.
— With assistance by Alfred Liu, and Xiaoqing Pi
bloomberg.com |
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