In the latest announcement, the Chinese government is focusing on easing the process for foreign businesses to operate locally in China as the nation’s companies are working on becoming global players.
China has declared to remove foreign ownership limits in major parts of the financial industry. Some of the foreign business organizations also announced that were especially tempted by the draft rules for using China’s new foreign investment law which will come into effect from January 1.
“To me what is key about the opening is where it comes from: China is looking to globalize its market, not necessarily liberalize it,” spoke Chantal Grinderslev, partner at Shanghai-based investment management consulting firm Z-Ben. According to her the difference will impact companies on how they choose to expand in China.
The announcement has been made as a result of pressure from the U.S. on trade. Experts believe this has helped China to attain its development goals which may not insult the vision produced by many foreign organizations for many market-oriented system.
Furthermore, sources reveal there are also restrictions on how much Chinese market foreign businesses use especially since China has now grown into world’s second largest economy. The world has also fostered its exposure to China with regards to technology, capital and trade between 2000 and 2017, as the Asian giant has curbed its exposure to the rest of the world since 2007.
According to the American Chamber of Commerce in China, it is alleged that foreign companies are expected to gain 10% to 20% of the Chinese market. Furthermore, foreign banks could have less than 2% of the market, although they operated in China for more than a decade.
The entrance of foreign financial institutions could however help China’s individuals and companies to gain an easy access to global markets. “There are weaknesses in the Chinese regulatory system that hurt the ambitions of the Chinese financial institutions in the U.S,” commented Lester Ross, chair of the policy committee of the American Chamber of Commerce in China.