China lifts major restrictions on foreign investment

January 5, 2020 | Investopaper

China has started lifting a major restriction on foreign investment in the financial sector. Although the Chinese government had long promised to open up its economy to foreign investment, it was a bit slow to do so in the financial sector. This is one of the moves that was long demanded by the US. Both the countries are trying to resolve the trade battle that has bruised the economy of both countries in recent times.

From the beginning of 2020, foreign banks can now set up fully owned branches in China.  This was announced by the banking regulatory authority, CBIRC on Friday. Previously, the foreign banks needed to have a local partner owning the majority stake to operate in China. This is one of the demands of the US and it seems to be a positive movement to bring an end to the trade dispute between two economic giants.

Beginning from the 1st of January, foreign companies specializing in the future contract can now be able to make an investment with no limits on the amount of the capital held.



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