China's financial opening has been firm and steady despite the growing financial risks amid the global outbreak of the novel coronavirus.
On Wednesday, foreign ownership caps on securities firms were scrapped, which has inspired many foreign companies to seek to set up wholly owned subsidiaries.
Todd Leland, co-president of Goldman Sachs in the Asia Pacific ex-Japan called this a significant milestone in the evolution of the business in China, expecting the policy to help the company move toward 100 percent ownership at the earliest opportunity.
Looking back, China raised the cap on foreign ownership of securities operations to 51 percent in 2018. Until then, international banks had been allowed only minority stakes in their Chinese joint ventures.
During the Summer Davos Forum last year, China announced it would bring forward the timeline of removing foreign ownership limits in foreign-invested securities companies, fund management firms and futures companies to 2020, one year ahead of the original schedule.
The top securities watchdog CSRC said it will continue to firmly implement the country's overall arrangement on opening up, actively advance the opening up of China's capital market, and approve the establishment of foreign-invested securities companies or the change of actual controllers of securities companies in accordance with the law.
As of February, China saw 15 foreign-owned securities firms having been established and 18 joint-venture securities firms queuing up for approval, CSRC data showed.
Chen Yulu, vice governor of the People's Bank of China recently noted the epidemic outbreak has not affected the implementation of China's financial opening policies, and the access of foreign-funded institutions together with the law revision work are still in process.
Under the influence of the epidemic, broader stock sell-offs and a massive oil price tumble roiled the global financial market in March, during which China's financial market was one of the least affected.
Higher yields for Chinese bonds and low valuations of Chinese shares are propellers for China's bond and equity market, said Lu Zhengwei, chief economist at Industrial Bank, with the warning of possible risks if foreign capital floods into the domestic market.
Opening up the financial sector did not mean increasing risks because China's systemic risk assessment and the financial supervision system have been continuously improved to forestall financial risks, Chen noted.
A package of opening-up policies and measures to attract capital inflows have also been introduced in recent years. China scrapped investment quota limits for Qualified Foreign Institutional Investors and Renminbi Qualified Foreign Institutional Investors, which will make it more convenient for foreign investors to participate in the domestic financial market.
For the stock market, overseas investors are encouraged to invest in the STAR market. The Shanghai-London Stock Connect program opened for trading in June 2019 as another channel for foreign capital inflow.
Meanwhile, China's stocks and bonds have been included in main global indexes, such as the MSCI, FTSE Russell, S&P Dow Jones and Bloomberg Barclays index, and their weights are steadily increasing.
China's economic resilience, large market scale and solid measures to further open up attract more and more overseas investors amid the global economic fluctuations, said Yu Xiuyuan, an investment officer at UBS Wealth Management.
