China will accelerate the further opening-up of its financial markets to foreign institutions, trying to phase in a fair and transparent financial market environment with more vitality, industry analysts said.
On Friday, Switzerland-based bank UBS received approval from the China Securities Regulatory Commission (CSRC) to increase its shareholding in its securities joint venture (JV) in China - UBS Securities Co - from the current 24.99 percent to 51 percent, becoming the first foreign securities firm to take majority stake in a JV in China.
Chen Li, managing director at Beijing-based Chuancai Securities Research Institute, told the Global Times on Sunday that the introduction of foreign securities firms to the Chinese market means "fresh water" in the domestic capital market. "Healthy competition will benefit the industry in the middle and long term."
Chen said China is opening up its financial market step by step as it has promised, and "the process will only get faster."
China announced in April measures to raise foreign equity caps in the banking, securities and insurance industries, allowing foreign financial institutions to take control of domestic securities brokerages up to the 51-percent level.
The UBS case is the first after the measures, according to the website of the CSRC.
UBS was also the first foreign bank to apply to raise its shareholding in a Chinese securities joint venture in early May after the measures took effect. Other foreign financial companies including JPMorgan Chase and Japan's Nomura also sent applications to the CSRC to set up securities firms with stakes of up to 51 percent in the same month.
"Growing our China business is key element of our strategy. The further opening-up of China's financial sector represents great opportunities for our wealth management, investment bank and asset management businesses," said UBS Group CEO Sergio Ermotti in a statement the company sent to the Global Times on Saturday.
Moody's Corp President and CEO Raymond McDaniel told the China Development Forum held in September in Beijing that in terms of opening up, China's financial sector cannot be neglected. "From the global view, the opening-up step of China's financial sector is relatively quick," McDaniel said.
Foreign financial institutions are all betting on lucrative opportunities in the world's second-largest economy, according to Li Daxiao, chief economist at the Shenzhen-based Yingda Securities.
"It is important to make the first foray into the Chinese market given the currently limited exposure of foreign securities business," Li told the Global Times on Sunday.
The lifting of the stake cap will enable foreign institutions to gain more market share, which will mean rising competition for domestic securities firms. On the positive side, the move will also promote the reform and improvement of the securities industry, Chen noted.
In the banking and insurance sectors, the Chinese government has also implemented an array of measures to deliver on its opening pledge.
On November 25, the China Banking and Insurance Regulatory Commission announced it approved Munich-based Allianz SE's application to begin setting up Allianz (China) Insurance Holding Co, which will become the first foreign-funded insurance holding company in China.
