Beijing unlikely to target financial companies in Sino-US trade war

Technology, rare earth minerals and the education sector have been mired in the brawl between China and the United States, but as Beijing contemplates new countermeasures, experts say the US financial sector would probably not be a target.

The stakes for China in this area are too big, they told CNBC this week, pointing out that the country is continuing its efforts to open the Chinese financial sector to global investors.

"We think that financial regulators (in China) … are looking for ways to really reform, make the system more liquid, bring more transparency, we have not yet seen a change in this attitude," he said. Douglas Peterson, President and Chief Executive Officer. S & P Global, a giant of financial services and financial ratings, told CNBC on Friday.

Speaking at the meeting of the Institute of International Finance in Tokyo, he said any initiative to target financial services would be "unusual" because the Chinese "need to access the global financial markets ".

Thursday, Tim Adams, president and CEO of the IIF, a professional association, also expressed this feeling.

"The Chinese government wants American and European financial institutions – they are opening the market, and what I've learned from the Chinese authorities is …" we want the financial community to be here ", a- he told CNBC.

Peterson said the Chinese yuan, or renminbi (RMB), would likely be the victim of any initiative to crack down on the financial sector.

"It is clear that one of their long-term goals is to make their currency a bigger and more dominant position in the trade.They would like prices such as oil or certain types of products or goods are calculated in RMB prices, "he said. "To do this, they must have a more active financial market, be more involved in the global financial market."

Increased foreign ownership of assets denominated in yuan would help Beijing achieve its goal of strengthening the international acceptance and use of the Chinese currency.

More and more, Chinese markets are open to global investors. Last year, Chinese A shares – shares denominated in Yuan traded on the continent – were included in the MSCI Emerging Markets Index.

This year, Chinese bonds were included in the Bloomberg Barclays index, widely followed.

These inclusions also bring billions of dollars back to the Chinese markets. Analysts believe that the full inclusion in the Bloomberg Barclays index will attract about $ 150 billion of foreign inflows to the Chinese bond market of about $ 13 trillion, while the loonie will not be able to attract more than $ 13 trillion. inclusion of the MSCI index will also attract billions of dollars in inflows.

"There is also a very strong demand for foreign investors for Chinese assets," said Peterson. "So, close the access to the financial markets – I really do not think it's one of the measures that they are probably considering very seriously."

Until now, other sectors have been involved in commercial clashes between the two largest economies in the world.

The United States has ranked Chinese information technology giant Huawei on a list that essentially prevents it from doing business with US companies, while Chinese media have warned that Beijing could remove minerals of rare earths of industrial importance as a retaliatory measure in the growing economic conflict.

On Tuesday, China warned its citizens to work, study and travel to America, noting that the US had recently imposed some restrictions on some Chinese student visas.