China Eases Limits on Foreign Stakes in Financial Firms
Peter L. Alexander, the founder and managing director of Z-Ben Advisors, a Shanghai financial consulting firm, said
that because Chinese investors tend to have large holdings in relatively simple money market funds and have not yet shown much interest in purchasing exchange-traded funds, “there’s an opportunity for active managers.”
Mr. Zhu also repeated on Friday a Chinese pledge made late Thursday to ease joint-venture requirements for electric cars
and other so-called new energy vehicles that may be built in China’s free-trade zones.
Zhu Guangyao, China’s vice finance minister, said that his country would start allowing foreign investors to own 51 percent of Chinese securities firms, fund managers
and futures companies, and would allow them to own 100 percent three years from now.
Mr. Zhu said that China would also raise the allowed foreign investment in insurance companies, currently
50 percent for most companies, to 51 percent in three years and 100 percent in five years.
Still, the Chinese initiative could help Beijing rally political support from Wall Street banks and securities firms, which have profited from fees on Chinese purchases of American companies
but have long been limited in what they could do inside China.
China also plans to eliminate its current limit of 25 percent foreign ownership in banks, Mr. Zhu said, but did not say when it might happen..
The Chinese government said on Friday that it would relax or remove a broad range of limits on foreign ownership of banks and securities firms.
The current limit on foreign ownership is 25 percent for large, publicly traded securities firms
and 49 percent for most other businesses in these categories.