Phoenix TV:
Mr. Guo, we noticed that the U.S. administration has imposed sanctions on some Chinese companies and individuals. What's the impact of the sanctions on China's financial market and system? Where do Chinese financial regulators stand and what measures will be taken in response to the sanctions? In addition, what new steps will be introduced this year to advance the opening-up of the financial sector? How will the security review mechanism on foreign investment affect the investment of foreign financial institutions in China? Thank you.
Guo Shuqing:
Every country has its own sovereignty. This is a long-established consensus among the international community. Both China and the U.S. are sovereign countries, and we all have our own sovereignty. Therefore, financial institutions in China must be regulated in accordance with Chinese rules, just as financial institutions in the U.S. must follow U.S. rules. The U.S. has interfered a lot in Chinese internal affairs, which we think is groundless and unreasonable. We firmly oppose such interference. CBIRC as well as China's banking and insurance system as a whole will never act in accordance with U.S. laws and regulations. We must implement China's laws and regulations. Financial institutions in Hong Kong, including Chinese-funded institutions and foreign-funded institutions, must conform to Hong Kong's laws and regulations. We will not implement the U.S. sanctions, and we firmly oppose such sanctions, which are totally non-binding. However, we are willing to cooperate with American financial institutions, companies in all sectors, and intermediary agencies. In fact, China's opening-up has been advanced at a fast pace. As I mentioned just now, over the past three years, we have approved the establishment of more than 100 foreign banking and insurance institutions in China. For example, German insurer Allianz was approved to set up a 100% foreign-owned subsidiary in China; Crédit Agricole Corporate and Investment Bank and Bank of China jointly established a wealth management subsidiary; the largest asset management company BlackRock cooperated with China Construction Bank in pension fund management; and British multinational asset management company Schroders is cooperating with the Bank of Communications. Up to now, we have approved the establishment of 25 wealth management subsidiaries. Many are in cooperation with foreign capital. We welcome more foreign investment, no matter if it's in the form of sole proprietorship or joint ventures. Many of the examples I gave now are joint ventures. This year, we will continue to consider expanding cooperation in these areas and further lowering the threshold for foreign investment to ensure they receive the same treatment as Chinese-funded institutions. In fact, no field is not opening up.
There is concern among the domestic public, including some officials and intellectuals, that foreign capital may bring about disruption and damage to China's financial market. As far as we know, foreign-funded institutions generally observe Chinese laws in their operations. The amount of their total assets, loans and deposits in the Chinese market is on the rise, but the proportion is in decline. For example, foreign-funded banks now account for only 1% of China's banking industry, down from 1.3% and 1.4% before. Their market competitiveness is limited. Foreign-funded insurance companies account for about 6%, higher than that of the banks, but their influence is also limited. Therefore, we continue to encourage foreign financial institutions to enter the Chinese market for common development. Thank you.
