http://www.treas.gov/press/releases/hp418.htmMay 23, 2007
HP-418
Financial Sector Reform Fact Sheet
Second Meeting of the U.S. China Strategic Economic Dialogue
As leaders in the global economy and in the international financial and trading systems, the United States and China share a resp*****ibility to promote balanced and sustained growth in their economies. A competitive and efficient financial sector will be an engine for growth in China's fast-growing economy, providing opportunities for American manufacturers, farmers, and other service providers. As China becomes progressively more integrated into the global economy and financial system, stability in China's financial sector becomes increasingly important for the U.S. economy. Introduction of U.S. securities firms, asset managers and insurance companies will help to develop expertise and depth in China's markets and improve the stability of the market.
During the second meeting of the Strategic Economic Dialogue, China announced it will take steps to encourage growth and competition in its financial sector.
Expansion of U.S. Financial Services Industry: China agreed to remove a block on the entry of new foreign securities firms and resume licensing securities companies, including joint-ventures, in the second half of 2007. In addition, China will announce before SED-III that it will allow foreign securities firms to expand their operati***** in China to include brokerage, proprietary trading and fund management. This will create opportunities for U.S. firms and provide new competition and expertise in the Chinese securities industry.
Increased Qualified Foreign Institutional Investors (QFIIs) Quotas: To develop broader and deeper integration into the global financial market, China will raise the quota for Qualified Foreign Institutional Investors from $10 billion to $30 billion.
The United States also welcomes China's May 10, 2007 announcement to expand QDII investment to include equity investment. This change can help diversify financial sector assets in China, which in turn can help enhance financial sector stability.
Pending Foreign Property Insurance Company Conversion Applicati*****: The China Insurance Regulatory Commission will make decisi***** by August 1, 2007 on applicati***** for conversion from branch to subsidiary that have been pending for more than a year. China also commits to abide by regulati***** that require 60 day processing for future applicati*****. This will allow for more efficient and cost effective operati*****.
RMB Transacti***** by Foreign Banks: China agreed to immediately allow foreign-invested banks to offer their own brand of RMB-denominated credit and debit cards. This will allow U.S. banks to offer a full range of RMB services to compete with Chinese banks that currently offer these services.
Market Access for Insurance Firms -- Enterprise Annuities: The Chinese Government agreed to streamline by SED-III the application and licensing process for the provision of enterprise annuities by financial instituti*****, which will allow U.S. insurance firms already operating in China to widen the range of services they provide and increase the amount of capital under their management for investment.
