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China lets foreign firms own 51% of securities joint venture

[HONG KONG] China will allow overseas firms to take controlling stakes in local securities ventures and remove foreign ownership limits on its banks, as the country continues to liberalize its mammoth financial industry.

Foreign firms will be allowed to own up to 51 per cent in securities ventures, vice-finance minister Zhu Guangyao said at a briefing in Beijing on Friday.

On Thursday, amid a slew of Sino-US dealmaking during President Donald Trump's visit to China, the Foreign Ministry said entry barriers to sectors such as banking, insurance, securities and funds will be "substantially" eased.

That will happen "in accordance to China's own timetable and road map," the ministry said, following a meeting between Mr Trump and his counterpart Xi Jinping.

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The moves would be encouraging to foreign banks, asset managers and insurers, who have long been kept on the margins in China, the world's second-largest economy, by various barriers.

Global banks are currently limited to owning 49 per cent of local securities joint ventures, frustrating their attempts to compete effectively with Chinese rivals.

The cap was behind JPMorgan Chase & Co's move to exit its China venture, as it sought a new structure that would give it more say in decision making.