Banks lukewarm on China’s big bang

• Published in: Global Capital 2017-11
• Main Author: Sin, Noah
• Format: Article
• Language: English
• Subjects: Banks; Capital markets; Financial services; Grammar; International finance; Securities markets
• ISSN: 2055-2165

Foreign entities will no longer be subject to the single shareholder threshold of 20% in Chinese banks, as well as facing no cap on ownership, and can also own 51% of securities joint ventures (JVs) – a limit which will be abolished altogether in three years, Zhu Guangyao, deputy finance minister said on November 10. [...]foreign participation will help China’s financial markets become more global, supporting greater internationalisation of the renminbi.” Foreign competition Given the head-start on its peers, HSBC might have little to worry about – at least in the immediate future – judging by other banks' attitude towards the latest rule change. A number of banks have declined to comment on the business implications of the new policy altogether, while others told GlobalRMB that they do not have an official house view on the reform as of yet. [...]the relationship between Chinese and international banks may be more nuanced than that, according to Becky Liu, head of China macro strategy at Standard Chartered, who argued that the foreign ownership reform will not only benefit foreign market participants, but China as well.