China's Finance Sector: the Financial Revolution in 2020 and Beyond

The outbreak of COVID-19 has made 2020 a very long and arduous year for people working in all sectors of the economy including participants in the global financial industry. But even in such a harsh environment, mainland China is still moving quickly to innovate and open up its financial sector without any hesitation.

Opening the China's financial sector further to foreign investors

the China's financial sector is almost fully opened, and foreign investors may decide on the shareholding structure of its financial subsidiaries in China based on their own investment strategy in future

• Eliminate foreign capital restrictions on foreign investment in the financial sector

According to the Special Administrative Measures for Foreign Investment Access (Negative List) (2020 Edition) (外商投资准入特别管理措施 (负面清单) (2020年版)) and the Special Administrative Measures for Foreign Investment Access in Pilot Free Trade Zones (Negative List) (2020 Edition) (自由贸易试验区外商投资准入特别管理措施 (负面清单) (2020年版)) published on June 23, 2020 by the National Development and Reform Commission and the Ministry of Commerce, and when compared with the 2019 version negative lists, restrictions on foreign shares ratio in securities companies, securities investment fund management companies, futures companies and life insurance companies have all been abolished. In other words, from the perspective of an institutional establishment, the China's financial sector is almost fully opened, and foreign investors may decide on the shareholding structure of its financial subsidiaries in China based on their own investment strategy in future.

• Further opening up investment channels for foreign investors

On Sept. 25, 2020, the China Securities Regulatory Commission (CSRC), together with other relevant authorities promulgated the Measures for the Administration of the Investment in Domestic Securities and Futures by Qualified Foreign Institutional Investors and Renminbi Qualified Foreign Institutional Investors (合格境外机构投资者和人民币合格境外机构投资者境内证券期货投资管理办法) and its implementation rules ("QFII/RQFII Rules"), which took effect on Nov. 1, 2020.