China starts lifting restrictions on foreign investment

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(Beijing) – China has started lifting major restrictions on foreign investment in its financial sector, a move long demanded by the United States as the world´s two biggest economies are locked in a fierce trade battle.

From the start of 2020, foreign banks can now set up wholly-owned branches in China without a local partner holding the majority stake, the banking regulatory authority, CBIRC, announced.

In the past, foreign banks were required to have a local Chinese partner and not allowed to hold more than 49 percent of their respective joint ventures.

The announcement could be seen as a gesture of goodwill by China towards the US as Washington says a preliminary trade agreement between the two sides looks set to be signed this month.

The world´s top two economies have been waging a merciless trade war since March 2018, resulting in mutual tariffs being slapped on hundreds of billions of dollars´ worth of annual trade.

Beijing has long promised to further open up its economy to foreign investment, but it was slow to do so in the financial sector.