China’s central bank is drafting a package of reforms which would give foreign investors greater access to the nation’s financial services industry, according to sources familiar with the matter.
The People’s Bank of China will convene an internal meeting on Tuesday to discuss its proposals and get feedback from Chinese institutions, said the people, who asked not to be names.
The meeting will also discuss the timetable for opening up the financial sector and the lessons learned from previous cooperation with foreign firms, they added.
While the details of the plan have yet to be finalised, it may include permission for foreign institutions to control their local finance-sector joint ventures, as well as raising the current 25 per cent ceiling on foreign ownership in Chinese banks.
It may also allow foreign firms to provide yuan-denominated bank card clearing services. The China Banking Regulatory Commission is also said to be involved in the proposal.
The PBOC couldn’t immediately comment on the matter. The CBRC didn’t immediately respond to a fax seeking comment.
China sent a signal it plans to press ahead with opening up the financial sector when central bank Governor Zhou Xiaochuan said in June that too much protection for domestic institutions weakens the industry and can lead to financial instability.
Last month, China’s cabinet said the country will continue to open up various industries, including banking, securities, insurance as well as electric cars.
Currently, overseas investment banks can only hold minority stakes in their local securities joint ventures, and have been largely excluded from lucrative businesses such as secondary-market trading in Chinese debt and equities, as well as from managing money for wealthy clients.
JPMorgan Chase chief executive officer Jamie Dimon, who last year exited a minority-owned Chinese investment-banking joint venture, said in June the US bank is patiently negotiating with Chinese regulators to find a new structure that would eventually allow full control.
China Insurance Regulatory Commission Vice Chairman Chen Wenhui said earlier this…