EY recently released the 2023 Annual Report on China's Financial Reform and Opening-up (hereinafter referred to as the "Annual Report"), which sorts out the main policies, events and trends of China's financial market reform and opening-up in 2023, aiming to provide domestic and foreign institutions with an overall overview of China's financial reform and better understand the process of financial reform and opening up.
Ernst & YoungMs. Xin Yi, Senior Partner, Financial Services, Greater ChinaHe pointed out that as an important aspect of the road of financial development with Chinese characteristics, China's financial reform and opening up have achieved fruitful results in 2023, creating a more open and favorable environment for foreign institutions to invest and expand their business in China, and bringing new opportunities for Chinese institutions to go global through the "Belt and Road" initiative, and further enhancing the competitiveness of Chinese financial institutions.
Ernst & YoungMr. Jiang Haifeng, Head of the China Financial Reform Working GroupAt the press conference, the "2023 Annual Report on China's Financial Reform and Opening-up" was released and interpreted on the spot.
The annual report summarizes the development process and outstanding achievements of China's financial market opening up from the following seven dimensions.
1.Market Construction:China has taken multiple measures to promote the two-way opening of the financial market, promote the facilitation of cross-border investment, steadily promote the internationalization of the RMB, significantly improve the degree of capital account opening, and international investors continue to increase their holdings of domestic financial assets. China has continuously improved the investment mechanism for domestic and foreign qualified investors, enriched the cross-border connectivity mechanism, and created a number of cross-border products, such as Shanghai-Shenzhen-Hong Kong Stock Connect, Bond Connect, Swap Connect, etc., which have provided domestic and foreign investors with more investment options and accelerated the formation of a new pattern of high-level opening up of China's capital market.
2.Industry Development:In 2023, as the opening up of China's financial industry continues to advance, the opening up of the financial market will be fully recognized by the international market, and foreign investment will accelerate to seize China. The level of opening-up of the banking, insurance and asset management industries has continued to improve, and the depth and breadth of opening-up have been expanding.
3.Institutional Introduction:In 2023, benefiting from the continuous improvement of the regulatory model and the continuous optimization of the business environment, supporting and encouraging qualified foreign investment to enter the financial services field, more and more international financial institutions such as foreign banks, insurance, and investment management will rush to land in China and set up branches.
4.Institutions go to sea:With the increasing breadth and depth of China's high-level two-way financial opening-up, in addition to "bringing in", domestic financial institutions have also accelerated the pace of "going overseas" and actively participated in global competition. In 2023, Chinese banks, insurance companies, and asset management institutions will continue to expand overseas markets, and their global influence will continue to increase. In the long run, in both the domestic and international markets, the "two-way travel" of financial institutions will help promote the high-quality development of China's financial market.
5.Business Conduct:In recent years, the scale of cross-border business in China's financial industry has been expanding and the types of business have gradually increased. The market size of cross-border businesses such as QFII, QFLP and QDLP has shown a steady growth trend, providing financial institutions with broader market opportunities and innovation space for business development.
6.Regulatory Reform:The regulatory authorities continue to explore and bring forth the new, further give full play to the flexibility of market resource allocation, improve the business environment, attract foreign investment, and promote financial opening-up, such as the establishment of the first financial committee, the establishment of the first financial working committee, the establishment of the State Administration of Financial Supervision and Administration, and the convening of the first financial work conference. While improving the open system, we do not forget to stick to the bottom line of risks.
7.Area open:Regional opening-up is an important part of the development of financial reform and opening up. At present, there are 22 free trade zones (ports) in the country, and China's free trade zones (ports) have grown from few to many and from scratch, forming a multi-field complex comprehensive reform and opening up trend, with an all-round and gradient opening pattern in the east, west, north, south and middle.
In addition, the construction of Shanghai's high-level global asset management center in the annual report provides a perspective on the construction process of Shanghai's international financial center and global asset management center from four perspectives: "agglomeration of asset management institutions, high-level interconnection, active product innovation, and close industry exchanges", so as to better drive the future development of Shanghai's asset management industry.
Finally, the annual report also provides an outlook on the future prospects of China's financial opening-up, and analyzes it in conjunction with the Service Trade Restrictiveness Index (SLRI) of the Economic and Development Cooperation Organization (OECD), indicating that there is still broad room for China's future financial opening-up. Looking ahead, we look forward to seeing a more mature, stable and innovative Chinese financial market, and EY will continue to monitor China's financial reform trends, actively contribute to the high-quality development of China's financial sector, and provide valuable voices for market participants.
Note: [1].Ernst & Young Huaming Certified Public Accountants (Special General Partnership).
This article is prepared for general information purposes only and is not intended to be relied upon as accounting, tax, legal or other professional advice. Please ask your advisor for specific advice.