ANNOUNCEMENT 30 Sep 2019
September 30th, 2019 - The Chinese State Council announced it would be liberalising its stance towards foreign investment in the insurance and banking sectors.
NUMBER OF INTERVENTIONS
PRC State Council, September 30th, 2019. (国令第720号 国务院关于修改《中华人民共和国外资保险公司管理条例》和《中华人民共和国外资银行管理条例》的决定)
On September 30th, 2019, the State Council of China penned its Order No. 720 (hereafter, 'Order'), which changed two pieces of Chinese regulation pertaining to the insurance and banking sectors, respectively.
Vis-à-vis the insurance industry, the Order newly allowed foreign insurance groups to set up foreign-funded insurance firms in the Chinese mainland, thus relaxing the market entry conditions for such foreign firms.
Please see the other intervention related to this state act for information on the other changes.
The policies contained in the Order went into effect when the order was publicly released: October 15th, 2019.
The Chinese State Council, on September 30th, 2019, printed a policy entitled Order No. 720 (hereafter, 'Order'). The Order made four liberalising changes to rules on foreign-invested enterprises' (FIEs) operations in the insurance and banking sectors.
Regarding the insurance industry, as well as liberalising market entry conditions for FIEs to set up insurance businesses in China (please see other intervention associated with this state act for information), the Order also allowed overseas financial institutions to become shareholders in such insurance firms.
The other part of the Order, pertaining to the banking industry, allowed foreign institutions to establish both branches and wholly foreign-owned banks in the Chinese mainland, as well as setting up branches along with Sino-foreign joint ventures.
Furthermore, the requirement for foreign banks to get prior approval for conducting Renminbi (RMB) business was removed, as well as the restriction on such banks underwriting government bonds.
Finally, the floor limit for foreign bank branches in the mainland to take Chinese time deposits from Chinese nationals was reduced to USD 70,700 (CNY 500,000) from USD 141,000 (CNY 1m).
The changes announced in the Order went into effect upon its release: October 15th, 2019.