Current GC Ticker Issue | Autumn 2019 | Taking Stock of China’s Books
Last December marked the 40th anniversary of China’s reform and opening-up policy, leading China through a period of transition and towards a consumption and service-driven economy. However, as the country’s economy becomes more mature, economic growth has slowed from the previous double-digit rates. At the same time, China is also facing external challenges, such as a weak global economy and US-China trade tensions, which are increasingly weighing on China's economy.
To counter this, China’s speed of reform and opening-up has accelerated in the recent past. However, foreign companies are still confronted with major regulatory barriers to market access throughout various sectors. The challenges in the Chinese economy and uncertainty over the direction of economic reforms have brought the international community to call more strongly for further opening-up initiatives and market access incentives. In response, official announcements in the matter were repeated - most recently at the BOAO Forum for Asia, the CIIE in November 2018 and the World Economic Forum and resulted most recently in the publication of shortened negative lists or the drafting of a new foreign investment law.
Looking into China’s financial sector, just recently a series of reforms have been put in place: among others, China announced full foreign ownership of securities firms, futures firms and life insurers by 2020, overseas firms can apply for majority stakes in securities and mutual-fund management ventures and some asset requirements for foreign companies to operate in China were removed.
Reshaping the structure of corporate financing and reforming the banking system are essential for rebalancing the economy towards consumption. At present, China’s financial services sector is also shaped by the fast paced and ever-changing needs, Chinese netizens who are pushing towards a faster evolution, away from classical brick and mortar financial companies towards low maintenance, high output and round the clock online players like AntFinancial, WeBank or PingAn. At the same time, new financial tools such as cryptocurrencies led to a variety of complex blockchain ventures and an influx in online based peer to peer lending, bringing opportunity and risk to the market at the same time.
Which is why we will dive deeper into these themes with this GCTicker’s cover stories, ranging from the convertibility of China Yuan Renminbi (RMB), sustainable finance, how traditional institutions and fintechs are working together, and the opening up of the Chinese financial market.
We hope you enjoy reading!
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