China to Open Financial Sector to Foreign Banks

Our China lawyers work with many foreign clients seeking to establish a banking or financial entity in China. We are always happy to help these clients, but must let them know up front that this is a rather complicated and difficult process. Further, we find that foreign investors encounter substantial difficulties when seeking to participate in the China banking and financial business.
With the new year, all of this may be about to change. In keeping with the spirit of the 19th CPC National Congress’s which announced the goals of promoting “all-round opening”, the China Banking Regulatory Commission (CBRC) intends to revise regulations relating to Foreign-funded Banks.
Key items to be revised are as follows:
1. The CBRC aims to publish further regulations clarifying the conditions, procedures and application process for the establishment of foreign funded banks and equity investments made by the foreign funded banks to gain partial equity positions in local Chinese banking and financial institutions.  In short, the goal is to establish a clearer legal basis for foreign invested banking institutions to participate in the China market.
2. The CMRC plans to open up operations to foreign invested banking institutions by simplifying approvals in managing overseas finances, trusts securities and other matters. Rather than an extensive approvals process, Foreign invested baking institutions will be required to report on these activities periodically to regulators.
3. Finally, the CBRC hopes to equalize market access standards between local banks and foreign invested banks, including simplification of establishment of branch offices, and simplification of procedures for raising and issuing debt among other changes.
These changes are not yet fully implemented, and the plan remains open for outside comment. Lehman, Lee & Xu China lawyers are watching this and other China banking and financial markets related developments and will keep you informed.
Published by Crys Zheng on January 11th, 2018 tagged China News

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