(Yicai Global) Jan. 12 -- Shanghai will relax access restrictions for foreign financial institutions to encourage more of them to set up joint ventures and wholly-owned units in the city, Shanghai Municipal Financial Service Office Director Zheng Yang told Yicai Global.
Foreign ownership of some JVs in the sector has reached 51 percent in Shanghai and the city will encourage internationally backed financial institutions to participate in the market with equal footing, Zheng said yesterday.
The municipal government will fully consider the reasonable development of foreign-funded firms and JVs with Chinese groups as international businesses have advantages overseas and have room to expand in free-trade zones and free ports, said Zheng.
"We will fulfill local regulatory responsibilities to achieve full coverage of financial supervision under the leadership of the State Council's Financial Stability and Development Committee and we will emphasize taking the initiative to prevent and resolve financial risks," Zheng said.
The Shanghai Municipal Financial Service Office will increase the functionality of local financial regulatory bureaus, he said.
Shanghai judicial departments, the Shanghai People's Congress and state financial administrative departments will promote the improvement and timely revision of relevant laws and regulations and encourage the establishment of the Shanghai financial court.
Shanghai will strengthen financial regulations and open up, Zheng said, adding that Shanghai will systematically expand financial sector liberalization in the future.
China will lift restrictions limiting a single foreign entity's stake in a Chinese bank or financial asset management company to 20 percent and overall foreign ownership in such groups to 25 percent to implement a uniform rule for domestic and international players, Chinese Vice Finance Minister Zhu Guangyao said in November last year.
The ratio of foreign direct or indirect investment in securities, fund management and futures companies will no longer be restricted in three years, and the cap on the shareholding proportion of foreign investors backing life insurance JVs will be gone in five years, Zhu said.