At a press conference a few days ago, one of our cadres said that in recent times, the State Administration of Financial Supervision has launched more than 50 measures to open up the financial sector to the outside world.
Among them, the restriction on the proportion of foreign shares has been abolishedThis includes the abolition of restrictions on the equity ratio of foreign capital participation, acquisition, and capital increase in financial institutions. At present, foreign capital can hold 100% of the equity of banking and insurance institutions, achieving full control.
In the past, China's banking and insurance industry was very weak, the system and mechanism were immature, and it was easy for mature Western banking and insurance companies to find their teeth all over the place if we opened up rashly. At that time, it was difficult to keep a few large banks, let alone local bank insurance. Over the years, we have the ability to speak to them, so we are open and very reasonable.
People always have to clean the house before they can be treated. Sooner or later, you have to treat yourself, and the question is when to treat you. Bancassurance must make money, and when you can make money lying down, you can treat yourself, and foreign capital will come in as a catfish, so that the bancassurance industry will become the source of living water, which is theoretically the best solution.
It is far better to open up now than to open directly twenty or thirty years ago. After all, at that time, the domestic value depression, foreign capital came in and bought aggressively, it was easy to form a pattern of joint venture cars, foreign capital formed a monopoly market, domestic bank insurance like domestic cars struggled to survive, joint venture cars lying on the credit book, although advanced, but lying to earn, and finally lying to the A pillar are broken.
But the reality is that in 2020, foreign direct investment was about $50 billion per quarter, or even more. In 2021, it remained at about this amount until the third quarter of 2022. As a result, in 2023, foreign investors will only invest about $5 billion per quarter.
It is true that the decline in foreign investment will not have much impact, but the stock of foreign capital in China's market is very large, and it plays a relatively important role in the growth of GDP and domestic employment. There is no problem for foreign investors not to invest for the time being, and what if foreign investors directly withdraw their investment?
The current situation is that the new investment has decreased sharply year-on-year, which has only relaxed the restrictions on the proportion of foreign investment in bancassurance. It is okay to express the hope that foreign businessmen will not withdraw, but foreign businessmen are just outside businessmen, not fools outside, and they are not allowed to come when making money. It's true.
At present, local banks are not only involved in local debts, but also in real estate, and local banks are not able to make money. Although the big banks are still relatively safe, how can foreign capital squeeze into the market? Insurance is even more difficult to enter, as far as one Chinese life expectancy, accounting for one-fifth of the market, Ping An Insurance does not let much. The channel has been determined for many years, how can foreign capital come in?
After all, domestic enterprises are risk-averse, and it is easy to say that they make a profit, and they will be held accountable if they lose. In the field of venture capital, foreign capital accounts for the majority, and almost none of China's Internet companies have not had foreign investment.
At the end of the day, U-turns are an art. It can't go on, the big state-owned banks are risk-averse, the local banks themselves are not clean, insurance has already sat firmly in the Diaoyutai, and now foreign capital is leaving, and venture capital can't do it. In the end, it was like 2022, and suddenly it couldn't hold on.
The actual significance is not much for the time being. There is more meaning in expressing one's position.
It's just a gesture, I hope you don't leave. That's all, several other press conferences do have blockbusters, only this one, don't take the significance too much.