A senior Chinese official has said that the Dragon is all set to ease restrictions on foreign ownership stakes in the financial sector and reduce tariffs on automotive imports, after receiving criticism from the US and other trading partners. Addressing a briefing following President Donald Trump's state visit to China, Vice Finance Minister Zhu Guangyao said they would lift limits on foreign ownership stakes in securities, fund managers and futures companies from 49 per cent to 51 per cent and end restrictions after three years. He added that China would similarly raise such limits in insurance companies and eliminate curbs after five years.
He said, “In other words, foreign owners can have full ownership of such companies” after three to five years. China will also “abolish” limits on foreign ownership stakes in banks, the minister said, without stating when the move would take effect. A single foreign investor could not own more than 20 per cent of one bank, until now, and a bank could have not more than 25 per cent total foreign ownership. Beijing will also gradually reduce tariffs on automotive imports, without providing details. “This opening up is decisive and the effect will be far-reaching,” Zhu said.
The US President has prioritised narrowing the US trade deficit with China. US Commerce Secretary Wilbur Ross said the topic was a “central focus” of Trump's talks with President Xi Jinping. Trump's visit saw Chinese and American companies sign a series of multibillion-dollar business agreements in a tradition aimed at blunting criticism of Beijing's trade policies. Commerce Minister Zhong Shan said agreements signed at a ceremony, totalled $253.4 billion, even though many were memoranda of understanding or other arrangements that were less than firm contracts.
Such contract signings are a fixture of visits to Beijing by foreign leaders and are meant to defuse foreign complaints about China's trade surpluses and market barriers. They often represent purchases already made by Chinese mobile phone makers, airlines and other customers that are collected for the visit, which means they have little effect on the trade balance. The contracts give Trump the opportunity to claim a rare political win following a first year in office marked by little legislative progress on health care and taxes. China's trade surplus with the United States in October widened by 12.2 per cent from a year earlier to $26.6 billion. The total surplus with the United States for the first 10 months of the year rose to $223 billion.
