Investment in China has become easier thanks to regulatory change. The country’s securities regulator has released new guidelines for foreign investment in joint ventures.
Some existing restrictions have been eased, such as the limit of 30% for single foreign investor seeking a stake in securities ventures in China, either directly or though a partner. In addition, the previous restrictions stating foreign banks could only own up to 49% of a Chinese joint venture has been removed.
The cap on foreign ownership for joint ventures is now 51% for those that provide underwriting and trading services.
The restrictions have officially been lifted so that foreign firms who wish to either enter into joint ventures or change the terms of an existing partnership can now apply to the securities regulator.
CNBC commented of the news: “The move is part of China’s pledge to ease foreign ownership curbs to allow more international banks to build their presence in the securities business… in the world’s second-largest economy.”
It was also announced earlier this month that restrictions on car manufacturers in China would be eased. Previously, foreign car manufacturers could only base themselves in China, the world’s biggest automobile market, provided they entered into a joint venture with a local company.
However, some have commented this will mean local Chinese manufacturers will have to work harder as they may no longer enjoy the branding of popular western companies. Either way, it’s clear China is continuing to increasingly market itself as “open for business”.