Our new episode of FInsight: Global Financial Institutions Industry Podcast focuses on the regulatory environment for financial institutions (FI) in China.
This episode takes off from the article China’s Finance Sector: the Financial Revolution in 2020 and Beyond from China Law & Practice, written by our speakers, Kevin Yuan and Lucca Li.
On a high level, recent developments in China focus on fostering economic activity and inclusivity. The government has taken various steps to strengthen and open up the financial sector.
- Despite the COVID-19 pandemic, responsible authorities are still moving quickly in further opening the sector to both domestic and foreign investors. Some focus areas for financial institutions is economic inclusivity, promoting the healthy growth and development of the insurance sector, and developing fintech’s function to promote financial efficiency.
- Several initiatives are being implemented to foster innovation and investment, specifically in the Greater Bay Area (Guangdong – Hong Kong – Macau). One example is Wealth Management Connect, which would allow residents of Hong Kong and Macau to invest in wealth management products issued by participating Mainland banks.
- Microlending enterprises will be further regulated, with standards covering restrictions on cross-region business operations, minimum capital requirements, among others.
- Changes in the market are expected to continue in 2021 and beyond. Chinese regulatory authorities will continue to promote changes in the market, which means that financial institutions should continue to monitor and remain sensitive to these developments.
The ultimate goal is to further open China and make it a viable and attractive financial center to global investors. China’s focus on innovation is also something to look out for in the next few years.