China will remove foreign ownership caps for life insurers earlier than expected

SHANGHAI (Reuters) – China will remove foreign ownership caps for life insurers, brokerage firms and finance companies by 2020, a year ahead of schedule, the chief financial observer said Saturday.

According to a statement from the State Council's Financial Stability and Development Commission issued by the central bank, China will encourage foreign companies to create or take stakes in money-broker companies and allow foreign investors to hold more than 25% of holdings in insurance badet management companies.

The opening of its financial sector is an essential element of Beijing's efforts to resolve a trade war with the United States. Washington has accused China of restricting US companies' access to the market, forcing companies to transfer technology and offering little protection for intellectual property rights.

China's Financial Stability Commission said it was applying the "sooner than the other" principle when it came to easing restrictions on foreign institutions.

The People's Bank of China also announced that it would allow foreign-owned agencies to award ratings to all forms of interbank and publicly traded bonds.

He added that this would even allow more qualified foreign-rated credit institutions to develop credit rating activities for the interbank market and listed bonds, and to receive first-clbad underwriting licenses.

The Commission on Financial Stability, chaired by Chinese Vice Premier Liu He, met on Friday to discuss the evolution of financial reform in the first half of the year.

"At the present time and during the next period, national and international trends are complex and the stable operations of the national economy and the financial system face many risks and challenges", a- he declared.

He promised to continue to implement sound monetary policy and make counter-cyclical adjustments to maintain sufficient liquidity in the market.