Continued opening-up helps foreign finance cos

China's unwavering efforts to further financial sector opening-up will provide more business opportunities to foreign investors and boost confidence among financial institutions in China, business executives and experts said.

They made the remarks after Standard Chartered Securities (China) Ltd, or SCSCL, announced on Monday that it had been granted a license to commence securities business operations by the China Securities Regulatory Commission.

Based in Beijing with a registered capital of 1.05 billion yuan ($150 million), SCSCL will initially focus on four licensed business areas — underwriting, asset-backed securities, brokerage and own-account trading.

As an integral part of Standard Chartered Bank's China strategy, SCSCL received establishment authorization by the CSRC in January and completed legal entity registration in May, becoming the first newly established wholly foreign-owned securities company after China scrapped foreign ownership restrictions for securities, fund management and futures companies in 2020.

John Tan, chairman of SCSCL, said the company looks forward to the continued opening-up of financial markets in China, where capital markets will be increasingly attractive to global investors and financial institutions.

Setting the tone for China's economic work in the next year, the meeting of the Political Bureau of the Communist Party of China Central Committee on Friday stressed that reforms in key areas will be deepened to continuously inject strong impetus into high-quality development, and that high-standard opening-up will be expanded to consolidate the fundamentals of foreign trade and foreign investment.

Since the beginning of this year, a number of foreign-controlled or wholly owned securities, futures and fund management companies — such as the JPMorgan Fund and Morgan Stanley Investment Management — have been approved.

Dong Ximiao, chief researcher at Merchants Union Consumer Finance, said that the continuous reform and opening-up in the financial sector will increase financial resource allocation efficiency and enhance financial products and services, boosting the ability of financial services to serve the real economy.

Dong expects the financial sector to deepen reform and expand opening-up through measures including expanding business scope of foreign companies, and supporting foreign investors to establish more institutions in China.

Li Peijia, a senior analyst at Bank of China, said that the continuous improvement of China's business climate and its economic prospects have been jointly boosting confidence among foreign financial institutions in the Chinese market.

"Thanks to the effect of supportive policies and an expanding domestic market, the Chinese economy is expected to grow at a rate closer to its potential growth level in 2024, creating more favorable development conditions for enterprises," said Li.

"Recent moves by those global financial players sent a positive signal to the global financial market and are conducive to improving global investor confidence in China's financial market."

Zhang Rongrong, a director of non-bank financial institutions at Fitch Ratings, said that capital-market development is one of the top priorities for the Chinese authorities, as a well-functioning and established capital market can facilitate corporate financing outside the traditional banking system, helping improve both capital efficiency and allocation.