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Beijing has long promised to open up its economy more to foreign investment. But in the finance industry, the promise was slow to be honored. This time, China officially lifted part of its restrictions on foreign banks in the country. Explanations from Mary-Françoise Renard, from the University of Auvergne, head of the China Economic Research Institute at Cerdi.
Foreign banks will now be able to hold the entire capital of an establishment located in China. Fund management companies and brokers will have to wait a few more months. A little revolution all the same.
Until now, " the financial companies, the banks who wanted to invest in China, could only have about 20 to 25% of the capital. It was very restrictive, ”recalls economist Mary-Françoise Renard on RFI.
They had indeed to find the local partner, have their trust, the same management methods ... Very heavy constraints, which one cannot imagine that they disappear completely, specifies this specialist of China.
“ These companies will have to have an authorization. China has a number of safeguards on sensitive sectors. "However," it is less restrictive "for foreign operations," concludes Ms. Renard.
Already, in December 2019, there is a Swiss bank that was able to take a majority stake in a Chinese bank. This obviously interests a lot of the big American banks. This will allow these American banks to invest more in China and European banks, of course, too. You should know that the danger for the moment for Chinese banks is not very, very great, because obviously, the market share of foreign companies is extremely low
Mary-Françoise Renard, university of Auvergne 01/05/2020 - by Pauline Gleize Play
" We have to see if the institutional conditions will be met "
Be careful, this does not mean that there will be no more constraints. " We have to see how these measures will apply, who will control them, what are the real remedies of foreign companies, " notes Mary-Françoise Renard.
" We have to see if the institutional conditions will be met for this to work, " summarizes the researcher, for whom this measure must be understood as a sign of appeasement, in the context of the trade war.
Indeed, if China tends to gradually open its economy to the world, “ this opening is done under the constraint, most often, of international pressure. Not only, but still partly. "
In this case, these were measures that were widely requested by the United States. However, this announcement, if it was planned, still falls " just before the conclusion of an agreement which should normally be made on January 15 ".
These measures (...) nevertheless appear as evidence or are interpreted as evidence of good will vis-à-vis the United States
Mary-Françoise Renard, university of Auvergne 01/05/2020 - by Pauline Gleize Play
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