China is becoming more and more open to foreign investors to explore its vast resources in finance and banking, a welcome opportunity especially for the West to tap into its $21 trillion capital market.
This opportunity makes China an even more attractive hub for global investment bankers to shift their focus into the world's biggest economy.
With this, China has just ramped up measures and for the planned launching of the government's $21 trillion financial market by eight months, opening its doors wide open for investment banking giants like Goldman Sachs Group Inc.
The New York-headquartered behemoth, and competitors Morgan Stanley and JPMorgan Chase & Co. will now be allowed to apply to create fully-owned units to engage in a wide variety of securities and capital banking in China starting in April last year.
The approval was included in the trade deal signing between China and the US on Thursday, a decision seen to resolve in part a long-drawn dispute that has disrupted China's major stock markets.
Beijing had already shown its sincerity for a broader opening of its $45 trillion capital markets, which also includes providing its Western clients easy access to its insurance industry and asset management markets.
According to documents of the historic Phase One trade agreement, China will scrap restrictions it imposed on foreign bonds, and allow American-controlled services entities to take part in fund management, foreign exchange, securities, and futures trading sectors.
Beijing disclosed that it will not take more than three months to approve applications from electronic payments services companies, including MasterCard Inc, Visa and American Express to process transactions in the mainland.
China also said it will eliminate limits to allow US insurance providers entry into its financial markets and welcome credit rating agencies to its $14 trillion market.
The US, in return, will expedite pending requests by China's financial companies, including China International Capital Corp, Citic Securities Co., and China Reinsurance Group Corp.
The US will also commit to "|non-discriminatory treatment" of payment services firms like UnionPay Co. as well as leading Chinese credit rating agencies.
China will also open its capital markets to give access to overseas investments into its 2.37 trillion yuan ($344 billion) non-performing bonds sector, giving American investors direct access as part of China's arrangements in the midst of increase in delinquent equities.
By figuratively taking down its walls that loom over its vast capital market, China is relying on international investment companies to bring in $1 trillion in fresh capital into the mainland in the next coming years.
